Study Says Tariffs are to Blame for 50% Drop in Solar Installations

by | Dec 13, 2018

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US utility solar installations fell 50% between the second and third quarter of 2018, according to Wood Mackenzie Power & Renewables and the Solar Energy Industries Association (SEIA).

The decline in installations is expected to continue into 2019.

Tariffs imposed in January under Section 201 of the Trade Act have resulted in a loss of project volume that is “significant,” according to Wood Mackenzie analyst Colin Smith.

Utility Dive says that “total US solar installations reached 1.7 GW for the third quarter, and while the utility market dropped from Q2, residential market installations were essentially flat, as they have been every quarter this year.”

In more positive news for the solar industry, the utility solar pipeline has increased steadily from 23.9 GW in Q2 to 26.5 GW in Q3.

Past Predictions

June’s policy change by the National Energy Administration in China, which terminates any approvals for new subsidized utility-scale PV power stations in 2018, has significant ramifications for the global solar PV market, according to GTM Research.

In its “Global Solar PV Demand Monitor: Q2 2018 Market Trends Update,” the research firm writes that their expectation for Chinese PV demand in 2018 has fallen from 48.2 GW to 28.8 GW. China will now install 141 GW between 2018 and 2022, down from 206 GW. In addition:

  • Global PV demand in 2018 will fall to 85.2 GW, down from an expected 103.5 GW in GTM’s pre-policy change forecast.
  • As China’s market slows, module prices will fall more rapidly as a result of increased oversupply.
  • The benefits of lower module prices will be tempered in markets with import tariffs in place, such as the US and potentially India.

The report goes on to state that, even with a demand slowdown in China, Asia will continue to account for “at least 50%” of the global annual install through 2020.

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