Proposed tariffs put a chill on Vt. solar development

Published: Apr. 1, 2022 at 6:03 PM EDT
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WILLISTON, Vt. (WCAX) - On the cusp of building season in Vermont, the federal government is dealing solar project developers a blow. The U.S. Commerce Department is launching an investigation that could lead to significant tariffs, impeding businesses that rely on cheap solar panel imports.

China is trying to circumvent existing tariffs by selling solar parts to Cambodia, Malaysia, Thailand, and Vietnam -- which then sell the assembled panels to the U.S. Now, the U.S. is threatening tariffs on those four countries to stop the back door dealing.

“I’m obviously extremely frustrated. I’m angry,” said Thomas Hand, the co-owner of MHG Solar, a solar developer based out of Manchester.

The company identifies locations for three to four-acre solar arrays, acquires permits to put them there, and hires contractors to install the ground-mounted panels.

“We kind of play the quarterback role, we kind of bring everything together. Part of that is procuring materials. So, whether it’s steel racking, wiring, solar panels,” Hand explained.

The company this summer had two commercial projects in the pipeline that could be in jeopardy because of the impending tariffs. One would power the town of Fair Haven but involves panels from a manufacturer in Thailand.

“Just earlier this week, the module supplier canceled that order and just said, ‘We’re no longer importing to the U.S. We cannot handle the uncertainty of the new potential tariffs and so our solution is to stop importing to the U.S,’” Hand said.

Most of the solar panels powering Vermont are made-to-order by those Southeast Asian producers and the orders take about six to nine months to arrive in the U.S. Hand is now scrambling to find a new supplier for those two projects. If he doesn’t, that’s a loss of 4,000 labor hours and $200,000 of wages for about 20 Vermont contractors. “These are not sitting on a shelf or a warehouse that we can just go grab,” he said. “Pretty straightforward -- no solar panels, no solar project, no solar energy.”

Just the actual opening of this investigation, without even making a decision about whether it’s going to be permanent or not, has had such a chilling effect,” said Peter Sterling with Renewable Energy Vermont. He says about 2,400 Vermonters work in the solar industry at about 62 solar companies. The advocacy organization has sent the U.S. Commerce Department a letter imploring officials to reverse the decision due to its detrimental impacts. “Because there’s a moratorium on new wind power in Vermont, and we’re pretty much capped at the amount of in-state hydroelectricity we can generate, solar power is the only area of growth for Vermonters to access clean, renewable energy.”

If the new tariff does go into effect, the exponential cost will make it practically impossible for Vermont to meet its climate goals. That’s in large part because for homeowners, a higher upfront cost for solar extends the payback period. Instead of breaking even on electricity costs in 10 years, it could take 12 years or longer, meaning the deal isn’t as attractive to consumers and who may decide solar isn’t worth investing in anymore.

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