The U.S. trade administration recently made a U-turn on its decision regarding a tariff exemption for bifacial solar panels.
A bifacial solar panel is simply a solar module that generates electricity on both sides. In June 2019, these panels were granted a loophole in the Trump administration’s Section 201 ruling—which mandates a 25% tariff to most solar products produced overseas and imported to the United States.
At the beginning of October, less than four-months after the reprieve was granted, U.S. trade officials turned the proverbial car around and announced they were eliminating the bifacial panel tariff exemption.
Effective October 28th, the exemption will be reversed, and bifacial solar panels will be subject to the 25% tariff.
American solar panel manufacturers such as First Solar Inc. and SunPower Corp. may regain a competitive edge on foreign manufacturers with the exemption reversal, evidenced by a brief uptick in their stock prices shortly after the announcement. However, domestic solar energy developers and corporate buyers were left asking: what does this change of heart in policy mean for my project?
Developer Community Perspective on Tariff Exemption Impacts
- Some developers have indicated that there is not yet a sufficient difference in net capacity factor (or the efficiency with which panels convert sunlight to electricity) between monofacial and bifacial panels to justify switching to bifacial panels. Thus, the exemption reversal poses no negative consequences for developers still committed to monofacial panels.
- Other developers stated that some of their panel supply will not be affected due to the way solar panels have been safe-harbored.
Schneider Electric ESS Perspective on Implications for C&I Energy Buyers
- While any exact cost implications for our customers’ and our developers’ supply chains are yet to be specified, there is no immediate cause for concern.
- At this time, we’re expecting a slight increase in total CAPEX project costs for solar projects that utilize bifacial panels. This may result in a modest increase in PPA prices for some, but not all, utility-scale solar projects.
The official notice from the Office of the U.S. Trade Representative detailing the tariff exemption reversal may be found here.
The ESS Operations Team is continuing to monitor the implications for our developers and clients. If you have questions around the potential impact of individual solar projects, please reach out to our team.