Dive Brief:

• The U.S. International Trade Commission (ITC) reported mixed results on the Section 201 tariff on solar cells and modules, in place since 2018, in its midterm report released Friday.
• The commission does not rule on the success of the tariff, but informs Secretary of Commerce Wilbur Ross' recommendation to President Donald Trump for potential adjustments to the tariff. If business continues as usual, the tariff, currently at 20%, will continue stepping down 5% every year for two more years.
• Tariff advocates, largely solar panel manufacturers, and the rest of the solar industry, which mostly oppose the measure, both see the report as promising. The Solar Energy Industries Association (SEIA) had warned ahead of the midterm ITC hearings in December that the administration could tighten the tariffs to lower the phase-down to 1% annually.

Dive Insight:

The U.S. module capacity of crystalline silicon photovoltaic (CSPV) manufacturing in the U.S. has grown as foreign companies such as Chinese module manufacturer Jinko Solar and Korean PV manufacturer Hanwha Group invested in U.S. productions for assembling cells in the past two years.

"The price declines for CSPV cells and modules were directionally consistent with the historical downward trend in prices for CSPV products, though parties agreed that the prices were higher than they would have been without the safeguard measure," according to the ITC.

"There's no indication that the president has any inclination to revoke the tariffs," John Smirnow, SEIA's general counsel and vice president of market strategy, told Utility Dive.

SEIA is one of several stakeholders in the midterm evaluation proceeding that recommended changes to the tariff. The ITC will publish a report on certain modification recommendations, but Trump will have the last word regarding the tariff.

"As a political matter, there are many more U.S. jobs tied to project development and installation, as compared to module manufacturing, so the industry's lobbying effort is predominantly anti-tariff," Pavel Molchanov, energy group director and equity research analyst at financial services firm Raymond James, said in an email.​

"If the tariffs weren't in place, we'd be doing a whole lot better," Smirnow said.

SEIA published a report in December outlining the cost impacts on the wider solar industry, estimating $19 billion in unrealized private-sector investment in U.S. solar. The biggest impacts of the tariffs are on nascent solar markets in states like Alabama, Nebraska, Kansas and the Dakotas, which "won't be able to get off the ground because tariffs make solar uncompetitive," SEIA wrote.

Accounting firm BDO also published in their energy outlook survey that 50% of Chief Financial Officers in the power generation industry said U.S. trade policy has been unfavorable to their companies in the past two years.

The price differential is nearly $0.04 to $0.05 per watt for solar modules bought in the U.S. market, Molchanov said, adding that it's "not a game-changing amount... needless to say U.S. solar project developers would prefer the tariff to disappear altogether."

Not every solar developer is adversely affected by the tariff. It did not impact Competitive Power Ventures' decision to add 150 MW of solar in Pennsylvania, announced today, according to regulatory affairs senior vice president Thomas Rumsey.

The Section 201 tariffs have exempted bifacial modules, a technology that makes solar panels more efficient, from the panels, applying largely to CSPV modules.

"We do think that there's an opportunity for [Trump] to moderate the tariffs ... we think that continuing the bifacial is a good way to moderate tariffs in a meaningful way to address supply shortages" of solar panels in the U.S., Smirnow said.

Next Monday, stakeholders including SEIA will be filing comments on the tariff exclusion of bifacial modules.