Dissolution Of Tariff Exemption Benefits Valley-Based First Solar

Published: Tuesday, October 8, 2019 - 11:52am
Updated: Tuesday, October 8, 2019 - 12:47pm

On Friday, a tariff exemption recently put in place was taken away on bifacial solar panels — panels that absorb sunlight on both sides. The tariff exemption was granted in June and rescinded by the Trump administration Friday. It will completely dissolve on Oct. 28.

That means most U.S. solar panel manufacturers will be paying more to make panels. But, not all manufacturers will be paying more. The announcement reinstates a competitive advantage to Valley-based First Solar that it held since the original tariff was put in place.

In January 2018, the Trump administration placed a 30% one-year tariff on imported solar cells and modules, with the percent tariffed to decline over a four-year period. At the time the Solar Energy Industries Association estimated over 23,000 U.S. jobs would be lost in the industry since the majority of U.S. solar panel companies manufacture abroad.

U.S. solar companies fought the tariff almost unanimously, except for Tempe-based First Solar. The original tariff actually gave First Solar a competitive advantage against U.S. companies since the language in the tariff specifically named imported crystalline-silicon photovoltaic cells and modules. While First Solar does manufacture abroad and import into the U.S. like other companies, its panels are made by a different process, using cadmium-telluride which is not listed in the tariff.

The competitive advantage is not forever. The original tariff steps down each year and disappear after four years. But it could let First Solar take in higher margins on module sales than it would have in a tariff-free environment. First Solar has said its panels have been presold through 2020.

One Source, My Connection!