Extract from The Guardian
The US solar industry is a bigger employer than oil and gas extraction, but it fears disruption under a Trump presidency
Industry leaders fear solar subsidies may not survive Trump’s plans to cut $100bn of climate spending. Photograph: Bloomberg/Getty Images
The solar industry is wary. US president-elect Donald Trump has picked climate sceptics and oil industry executives for key positions in his administration, promising to scrap President Obama’s clean power plan and withdraw from the Paris climate agreement.
Underlying these concerns is a gnawing fear that the rapid expansion of solar energy generation overseen by Obama could soon be undermined.
The US installed a record 4.1GW of solar power in 2016’s third quarter, 191% up on the same period last year, in a boom fuelled by investment tax credits (ITCs) that offer solar and wind firms a 30% tax rebate.
Industry leaders fear the tax credits may not survive a Trump administration which has vowed to cut $100bn (£80bn) of climate spending, and will need to find more savings to fund $6.2tn (£5tn) of tax cuts.
“The tax credit will cost around $50bn in the period to 2022 and might be an easy choice for Trump,” said James Watson, the CEO of SolarPower Europe. “He’s got a very sceptical climate team around him who would not be too worried about cutting back the ITCs.”
Renewable energy companies have already been battered by Trump’s victory, with shares in one US solar giant, SunPower Corp, plummeting 14% the day after the election.
However, Trump has not yet commented on the future of the ITCs and some analysts say he may be loathe to go up against Republicans in Congress who recently voted to extend the scheme until 2022.
Taylor Dimsdale, the head of the E3G thinktank in Washington, said that while signals from the Trump team had so far been mixed “to put it mildly”, its planned fossil fuel renaissance could be met without axing renewable subsidies.
“There’s pretty strong bipartisan support for renewable energy,” he said. “A republican-controlled Congress just extended solar tax credits after a not particularly gruelling battle, because the solar industry is important in many states that are controlled by Republican legislatures and governors.”
More Americans are now employed in the solar industry than on oil rigs or gas fields so cutbacks would face resistance.
Even so, Dimsdale warned that if Trump makes good on a promise to cut corporation tax to 15%, “the ITC could be one of the first things to go”.
“I have no concerns that the US market will not grow in the next years, as it did before. Mr Trump is a businessman and will already know that solar is one of cheapest sources of electricity. In the end, we should not forget that the sun is a great American energy source.”
Few analysts foresee a contraction of the US solar industry even under a Trump presidency, but many expect growth to slow. Watson said that without the clean energy plan, “at best we will be looking at maintaining installation levels of around 8-10GW a year”.
Trump’s outspoken stand against Chinese trade practices could even benefit the US and European markets, by restricting cheap solar panel imports, according to Nitzschke.
SolarWorld has been an outlier in the solar industry, pushing strongly for anti-dumping measures against China. While Nitzschke is also president of the EU ProSun anti-dumping lobby group.
He said: “If the US and its president-elect take concrete actions against China’s breaking of WTO trade rules and destruction of manufacturing jobs, it can grow its solar market and domestic solar industry.”
Most European solar firms view the current tariffs on Chinese solar panels as an unnecessary tax on the industry that constrains expansion, and postpones the day that subsidies can be dispensed with altogether.
SolarPower Europe, however, expects the Obama administration’s tariffs on Chinese solar panels to be continued without change. “Trump is talking about a 50% tax on all Chinese goods entering the US but solar duties are already much higher than that,” Watson said.
Sign up to be a Guardian Sustainable Business member and get more stories like this direct to your inbox every week. You can also follow us on Twitter.
Underlying these concerns is a gnawing fear that the rapid expansion of solar energy generation overseen by Obama could soon be undermined.
The US installed a record 4.1GW of solar power in 2016’s third quarter, 191% up on the same period last year, in a boom fuelled by investment tax credits (ITCs) that offer solar and wind firms a 30% tax rebate.
Industry leaders fear the tax credits may not survive a Trump administration which has vowed to cut $100bn (£80bn) of climate spending, and will need to find more savings to fund $6.2tn (£5tn) of tax cuts.
“The tax credit will cost around $50bn in the period to 2022 and might be an easy choice for Trump,” said James Watson, the CEO of SolarPower Europe. “He’s got a very sceptical climate team around him who would not be too worried about cutting back the ITCs.”
Solar employs more than oil and gas extraction
Any moves in this direction could increase US emissions and have a toxic effect internationally, just as the budding solar industry is nearing cost parity with fossil fuels such as coal and gas.Renewable energy companies have already been battered by Trump’s victory, with shares in one US solar giant, SunPower Corp, plummeting 14% the day after the election.
However, Trump has not yet commented on the future of the ITCs and some analysts say he may be loathe to go up against Republicans in Congress who recently voted to extend the scheme until 2022.
Taylor Dimsdale, the head of the E3G thinktank in Washington, said that while signals from the Trump team had so far been mixed “to put it mildly”, its planned fossil fuel renaissance could be met without axing renewable subsidies.
“There’s pretty strong bipartisan support for renewable energy,” he said. “A republican-controlled Congress just extended solar tax credits after a not particularly gruelling battle, because the solar industry is important in many states that are controlled by Republican legislatures and governors.”
More Americans are now employed in the solar industry than on oil rigs or gas fields so cutbacks would face resistance.
Even so, Dimsdale warned that if Trump makes good on a promise to cut corporation tax to 15%, “the ITC could be one of the first things to go”.
Trump won’t derail solar growth
Not all solar companies are so pessimistic. Milan Nitzschke, the vice president of SolarWorld, the largest solar panel manufacturer in the EU and US, said:“I have no concerns that the US market will not grow in the next years, as it did before. Mr Trump is a businessman and will already know that solar is one of cheapest sources of electricity. In the end, we should not forget that the sun is a great American energy source.”
Few analysts foresee a contraction of the US solar industry even under a Trump presidency, but many expect growth to slow. Watson said that without the clean energy plan, “at best we will be looking at maintaining installation levels of around 8-10GW a year”.
Trump’s outspoken stand against Chinese trade practices could even benefit the US and European markets, by restricting cheap solar panel imports, according to Nitzschke.
SolarWorld has been an outlier in the solar industry, pushing strongly for anti-dumping measures against China. While Nitzschke is also president of the EU ProSun anti-dumping lobby group.
He said: “If the US and its president-elect take concrete actions against China’s breaking of WTO trade rules and destruction of manufacturing jobs, it can grow its solar market and domestic solar industry.”
Most European solar firms view the current tariffs on Chinese solar panels as an unnecessary tax on the industry that constrains expansion, and postpones the day that subsidies can be dispensed with altogether.
SolarPower Europe, however, expects the Obama administration’s tariffs on Chinese solar panels to be continued without change. “Trump is talking about a 50% tax on all Chinese goods entering the US but solar duties are already much higher than that,” Watson said.
Sign up to be a Guardian Sustainable Business member and get more stories like this direct to your inbox every week. You can also follow us on Twitter.
No comments:
Post a Comment