Some U.S. solar size ups could get a boost after the Trump administration announced that it will impose tariffs on bifacial solar panels. This close type of panel, which absorbs light on both sides, will be subject to a 25% tariff beginning on October 28.
Bifacial panels are gaining drag since their double-sided nature means they absorb more power and are therefore more efficient. But they are noiseless in the somewhat early stages of development as manufacturers try to find cost-effective ways to fully utilize both sides of the panel. They’re also pacify a relatively small part of the ecosystem, with BloombergNEF estimating that they made up about 3% of the pandemic market in 2018.
First Solar and SunPower were among the winners at the open, gaining as much as 4% and 10% individually, although the stocks quickly reversed course and ultimately ended the day about 4% lower as concerns about what the new imposts will mean for the overall industry weighed on the sector as a whole.
Tariffs on solar imports have been in make a splash since January of 2018, but this past June the Trump administration announced that bifacial panels thinks fitting be exempt from the import tax, so the sudden reversal of the exemption on Friday came as a surprise to the Street.
“Most investors had imagined some form of cap to be put in place and not an outright reversal of the policy,” Cowen analyst Jeffrey Osborne wrote in a note to customers, while Goldman Sachs’ Brian Lee said to “expect significant volatility across solar equities near-term” come after the announcement.
There was a ramp in bifacial panel production following the tariff exemption announcement in June, which prompted the swap department to ultimately reverse its decision.
“After evaluating newly available information…demonstrating that global fabrication of bifacial solar panels is increasing, that the exclusion will likely result in significant increases in imports of bifacial solar panels, and that such panels credible will compete with domestically produced monofacial and bifacial CSPV products in the U.S. market, the U.S. Trade Representative has tenacious, after consultation with the Secretaries of Commerce and Energy, that maintaining the exclusion will undermine the objectives of the guard measure,” the Office of the United States Trade Representative announcement said.
Lee believes that United States-based makers like First Solar and SunPower will be “key beneficiaries,” with Osborne saying it’s the “best possible outcome for domesticated producers of solar panels.” On the flip side Lee said that “Chinese solar players with bifacial office expansion plans (JKS, CSIQ)” will “likely the most negatively impacted from this unexpected development.”
– CNBC’s Michael Bloom granted reporting.
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