(Reuters) - The U.S. Commerce Department is “pleased” with the new domestic solar panel manufacturing investments announced since President Donald Trump imposed hefty import tariffs earlier this year, but continued investment could depend on the outcome of ongoing trade talks, a trade official said on Wednesday.
Solar companies including SunPower Corp (SPWR.O), China’s JinkoSolar Holding Co Ltd (JKS.N), and Korea’s Hanwha Q CELLS Co Ltd (HQCL.O) have all announced investments in U.S. manufacturing since Trump imposed the 30 percent tariff on imports in January. Trump’s move was intended to beef up domestic production but has also slowed the pace of domestic solar installations by pushing up costs.
“We’re very pleased to see all these announcements,” Cora Dickson, the Commerce Department’s senior renewable energy specialist, said at the Solar Power International trade show in Anaheim, California. Dickson said “many factors” would impact any further announcements, however, including ongoing negotiations with Canada and Mexico over the North American Free Trade Agreement, or NAFTA.
Those negotiations could affect the flow of components and finished products across borders and alter the economics of U.S. manufacturing of solar panels.
“Obviously, free trade is wonderful, and the flow of trade and the whole supply chain and global supply chain right now is being sort of disrupted and shifting around,” Dickson said. “You have to think about alternatives. But the end goal is to get China to play fair.”
Dickson noted that all of the new domestic solar capacity was for panel assembly and not the solar cells that are put together to make panels.
“We were hoping to see a resurgence in the cells. It hasn’t happened yet,” she said.
Solar cell manufacturing takes more time to set up than panel assembly, and a large share of cell imports - 2.5 gigawatts a year - are exempt from the tariffs.
Trump’s levy on solar panel imports in January was aimed at reversing years of decline in U.S. solar manufacturing under competition from cheaper Asian output. But most of the solar industry lobbied against a tariff, saying it would drive up the cost of solar panels and hurt the industry’s robust job growth.
Many solar companies have requested exemptions from the tariffs, and the Commerce Department last week granted seven of those requests, Dickson said. More decisions on exemptions will be made “in due course,” she added, without being specific.
Reporting by Nichola Groom in Los Angeles; Editing by Matthew Lewis