US President Donald Trump issued instructions in January 2018 to impose safeguard tariffs of 30% on imported PV cells and modules, which is now starting to impact project developers. A group of eight Republican Senators have also written to the US government asking for modules used in utility scale solar projects to be excluded from trade tariffs. (Photo Credit: Official White House Photo by Andrea Hanks)
- Cypress Creek is reported to have dropped plans to develop 1.5 GW solar PV pipeline in the US
- The investment worth $1.5 billion has stopped in tracks for Cypress Creek owing to rising costs due to trade tariffs in place
- Project development was supposed to have taken place across the country, including developed markets like California
- It has written to the US government seeking exemption from tariffs for 72-cell, 1,500 V crystalline silicon PV modules that are used in utility scale projects as domestic supply of such modules is insufficient
- Several companies as EDF Renewable Energy, NRG Renewables, E.ON North America, Tradewind Energy, Southern Current, Swinerton Renewable Energy and sPower have also joined Cypress Creek’s demand to exclude these modules from tariffs
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American PV project developer Cypress Creek Renewables LLC is reported to have stopped solar power projects worth $1.5 billion, thanks to inflated costs with the trade tariffs coming in place. In January 2018, the US issued orders to impose 30% safeguard tariff on imported cells and modules (see Trump Slaps 30% Tariff On Imported Cells & Modules).
The negative effects of the trade barriers on the US solar market are now starting. Speaking to Greentech Media, Cypress Creek confirmed that it will not be moving ahead with the 1.5 GW of projects, comprising some 20% of its pipeline, because of the tariffs.
These projects were to be located across the country, in emerging as well as developed markets as California, said Cypress Creek management. Most of these projects were at an early stage of development, for the others it had already secured off-take agreements.
The company has requested for exemption for the 72-cell, 1,500 V crystalline silicon PV modules that are used in utility scale projects stating that such modules serve a unique role in the market and deserve special treatment. These modules contain more watts per panel, compared to 60-cell modules. Domestic supply does not meet demand for such modules. Cypress Creek has been joined by other big names as EDF Renewable Energy, NRG Renewables, E.ON North America, Tradewind Energy, Southern Current, Swinerton Renewable Energy and sPower, according to GTM Research.
Recently, a group of eight Republican senators wrote a letter to the US Trade Representative calling for utility scale solar panels to be exempted from the solar tariffs. The letter reads, “The exclusion of 72-cell, 1500 volt solar panels from the safeguard measure will preserve tens of thousands of existing solar manufacturing and development jobs, foster market expansion and allow the US to once again fairly compete in the global marketplace for energy production technologies. Sensible product exclusions will uphold the integrity of safeguard measures intended to facilitate positive adjustment to competition from imports of certain crystalline silicon photovoltaic cells.”
While Bloomberg fears the tariffs would drive up prices of residential PV products, GTM Research believes it would have no cost related impact since there was enough smooth supply. The government is yet to respond to the letter.
All said and done, the Annual Energy Outlook 2018 by the US Energy Information Administration (EIA) hints towards the government’s line of thought on the tariffs. It reads, “Although the impact of the approved tariff on solar cells and modules is expected to affect utility-scale solar PV more than end-use solar PV, the effect of the increase in final system cost is expected to moderate by 2025.”