U.S. solar power industry affected by Trump’s tax measures

Solar power is now cheaper than ever. But not all is good news, since U.S. solar capacity fell by 15 percent during the third quarter

Solar power will be cheaper than ever. Nevertheless, U.S. solar capacity fell by 15 percent in the third quarter. This decline came as a result of the Trump administration’s tariffs on imported solar cells, which forced developers to delay large projects, according to a report prepared by consulting firm Wood Mackenzie.

However, the current weak state of the utility-scale market will be compensated by a higher-than-expected volume of projects over the next five years. The reason behind this is that solar energy is now cheaper than ever, the report indicates.

Quarterly utility-scale solar installations stood at 678 megawatts, the lowest since 2015 and down by 30 percent from last year. The total market, including residential and commercial installations, reached 1.7 gigawatts, Wood Mackenzie reported. The document was prepared by the U.S. Solar Energy Industries Association.

Changing trend

Deceleration is a new occurrence for solar power. The sector has been surging non-stop over the last decade. During the first three quarters of the year, this source accounted for 30 percent of the added capacity.

President Donald Trump recently announced new tariffs for all imported solar cells as of January, as part of a strategy aimed at helping U.S. manufacturers recover after years of declines.

Large utility-scale projects are the most vulnerable in the face of these tax rates, given that panels could represent up to half of the cost.

Solar installers opposed this measure as they depend on cheaper imported panels to compete with fossil fuels.

Most of the panels installed in the U.S. are made in Asia by companies like Jinko Solar Holding Co Ltd., Canadian Solar Inc., and SunPower Corp.

Against predictions

Wood Mackenzie downgraded its utility-scale forecast for 2018 from 6.8 GW to 6.6 GW as more and more projects are being pushed to 2019.

However, the firm also raised its forecast for 2019-2023 by 2.5 GW given that public service companies contract projects that will qualify for a federal tax credit that will disappear by 2020.

Developers will begin their projects next year, but will delay the purchase of new modules until 2020 or later, given that the tariff will drop by 5 percent each year.

The price of sliding solar panels is stimulating public service demand.

Early in the year, China’s move to drastically reduce subsidies for solar facilities triggered a swarm of low-cost panels made in China in the global market, which decreased prices.

The price of solar energy is falling to historic lows in all market segments, according to this report. Prices for modules manufactured in the U.S. have declined by more than 15 percent, as compared with the previous year.

Voluntary Solar Partnership in Florida

But not all values are decreasing. The Florida Public Service Commission (PSC) announced this week that it plans to extend the state’s Voluntary Solar Partnership (VSP) for a year.

This program offers customers of Florida Power & Light (FPL) the opportunity to participate (for $9 a month) in the construction, operation, and installation of solar power facilities, the PSC announced on Tuesday.

Customers can subscribe or cancel at any given time. The program will offer the chance to expand solar energy use in their communities. Furthermore, they will be able to do this without paying the costs related to the installation of residential and commercial solar systems.

By the end of the summer, over 36,000 FPL customers had joined this program. This number is expected to go up to around 40,500 per month.

Optimistic forecast

PSC president Art Graham seemed optimistic with regards to the program. “(renewable) Energy derived from these solar projects is fed into the grid to benefit the community,” he said.

So far, FLP has 84 solar structures spread throughout some 40 sites, generating 1,400 kilowatts (kW).

FLP is building another 53 solar structures in 22 sites.

The company serves nearly 5 million customers in Florida.

For more information, check Energía16

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