January 24, 2018

Solect expects pain from new solar tariff

Solect COO Jim Dumas (right) and Chief Development Officer Craig Huntley. The company is expecting to be hurt by new federal tariffs on solar-panel imports.

Hopkinton solar company Solect Energy is expecting a sudden stop in growth — or even a drop — after a new tariff on solar-panel imports was announced this week.

Solect has grown along with the rest of the solar industry in Massachusetts and nationally amid a drop in prices for solar panels, based in large part on cheaper imports.

President Donald Trump said Monday the federal government will put a 30-percent tariff on solar panels and washing machines to protect American manufacturers. Solect and the solar trade organization are both predicting pain for the solar industry as a result.

"This decision just stopped all that [growth]," said Ken Driscoll, the CEO and co-founder of Solect. "It's no longer going to be a star of the economy, it just isn't."

Solect has 75 employees, including sales, design, engineering, project managing, finance and logistics. It outsources to contractors for installations. Driscoll said he no longer expects job growth at the company.

"I don't know if I have to lose people, but I know I can't hire more people," he said. For the company to sustain growth, he added, "it has to come out of our margin, plain and simple."

The Solar Energy Industries Association was more pessimistic, saying in a statement it expects the loss of roughly 23,000 American jobs this year, including in manufacturing, and will bring a delay or cancellation of billions of dollars in solar investment.

The tariffs "will create a crisis in a part of our economy that has been thriving, which will ultimately cost tens of thousands of hard-working, blue-collar Americans their jobs," Abigail Ross Hopper, SEIA's President and CEO, said in a statement.

The United States had 38,000 jobs in solar manufacturing at the end of 2016, and all but 2,000 made something other than cells and panels, according to the SEIA. The organization said the new tariff will take away from that number, not add to it as the federal government argues.

The tariff follows a ruling last September from the U.S. International Trade Commission that cheaper imported panels were hurting American manufacturers. The price of generating solar energy fell by 85 percent from 2009 to 2017, according to the research firm Lazard.

The tariff begins at 30 percent before falling to 15 percent after four years.

Solect buys its solar panels from LG, which produces them in South Korea, Driscoll said. He said of the tariff decision, which was nervously anticipated in the solar industry, "This isn't about jobs, this is politics."

Massachusetts has grown to be one of the national leaders in solar-energy production, despite its small size and northerly location, thanks largely to subsidies encouraging companies and homeowners to install panels. Massachusetts ranks sixth nationally in amount of solar energy produced, according to the SEIA, and is second only to California in the number of solar-related jobs at nearly 15,000, according to The Solar Foundation.


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