Six months into his administration, President Trump has yet to take on energy policy. Meanwhile, the solar industry continues to grow despite uncertainty about federal support.
In a report from the Solar Energy Industry Association (SEIA), the first quarter of 2017 showed continued and impressive forward motion, with the installation of more than 2,000 Megawatts (MW) of new solar generation in the U.S., the sixth straight quarter of installation numbers over 2 Gigawatts. “It would be hard to overstate how impressive 2016 was for the solar industry,” said Abigail Ross-Hopper, SEIA’s president and CEO. “Prices dropped to all-time lows, installations expanded in states across the country and job numbers soared. The bottom line is that more people are benefitting from solar now than at any point in the past, and while the market is changing, the broader trend over the next five years is going in one direction – and that’s up.”
To look at the state of solar in the nation, it is hard to imagine that our current president has been such an outspoken critic of solar in the past. After all, he proposed slashing the research budget for renewables at the Department of Energy and pulling out of the Paris Climate Agreement. How can solar still be on the rise? Simple… It’s good business.According to Ms. Hopper,
“The majority of projects are economic- and not policy-driven at this point, so as the prices have gone down, installations have gone up.”
Trump Supports Solar…on the Border Wall?
One of President Trump’s campaign promises that has yet to see any significant progress is building a border wall between Mexico and the U.S. The price tag for the wall, estimated to be anywhere from $10-$70 billion, is the obvious sticking point and there seems to be no realistic plan for funding the project….until now?
“The president is committed to building the wall and securing the border and I commend him for it. He’s continuing to fight and following through on that promise. One idea he is looking at is a wall that would actually function as a solar panel to ultimately pay for itself,” House Majority Whip Steve Scalise (R-La.) told The Hill after meeting with Trump at the White House.
“I’m glad he’s being innovative and I’m fully supportive of helping him build the wall however we can legislatively,” Scalise added. “He is continuing to pursue every option to make sure it happens.”
The solar-powered border wall idea appeared to come completely out of left field, but in fact, the idea was floated earlier this year by a Las Vegas-based construction company, Gleason Partners LLC. Managing partner Thomas Gleason proposed the project to the Department of Homeland Security in April at an estimated the cost at $7.5 million per mile, claiming the wall will pay for itself in 20 years.
The Atlantic called Trump’s embrace of the solar wall idea as “…a politically simplistic troll… Environmental groups that believe the wall will hurt local ecosystems will still oppose the project even if it becomes carbon neutral. As Brett Hartl of the Center for Biodiversity said in a statement on Tuesday: “An ecological disaster with solar panels on top is still an ecological disaster. With solar panels on top.”
Renewable energy industry insiders may be laughing privately, but publicly, the idea is being damned with faint praise. In an interview with Business Insider, Bryan Birsic, the CEO of Wunder Capital, a renewable-energy investment firm, said that,
“We’re excited that President Trump sees the economic value created by solar installations, as solar prices continue to plummet… While we would prefer a different location and purpose for a large solar installation, we strongly support all additional generation of clean power in the US.”
Although to most people, the addition of solar to the already controversial wall simply adds to an already convoluted debate. But can solar advocates take President Trump’s suggestion of a solar wall as some sort of backhanded compliment or passive admission of solar’s economic viability? After all, admitting that solar can not only pay for itself but pay for the wall as well is a far cry from 2012, told Greta Van Sustern of Fox News: “ Solar, as you know, hasn’t caught on because, I mean, a solar panel takes 32 years — it’s a 32-year payback. Who wants a 32-year payback? The fact is, the technology is not there yet.”
Energy Secretary Perry Examines the Grid
In April, Energy Secretary Rick Perry ordered a 60-day study of the nation’s energy grid. The focus of the study is unapologetically anti-renewable and anti-state’s rights- the premise of the study is that state-specific renewable energy policies are reducing grid access for baseload power producers like coal-fired and nuclear power plants. This, despite the fact that the utility industry itself studies reliability constantly, and few or no problems have been reported by grid system operators.
Even the Edison Electric Institute (EEI), historically a critic of renewables and a staunch defender of the utility industry status quo understands the potential problems that can occur when federal regulators start messing with state policies. At the recent EEI annual conference in Boston, Pat Vincent-Collawn, the incoming chair of EEI made no bones about the fact that EEI wants the DOE to keep its hands off the grid. “We have one of the most reliable generation fleets in the world,” said Vincent-Collawn, continuing,
“Hopefully the study takes into account good utility planning and … will show what we’ve known for a long time, which is that we know how to plan the grid.”
In a polite but blistering letter to Secretary Perry, Iowa Senator Charles Grassley called into question the motivations for the study, the need for the study, and the cost of the study. Grassley wrote in the letter,
“I’m concerned that a hastily developed study, which appears to pre-determine that variable, renewable sources such as wind have undermined grid reliability, will not be viewed as credible, relevant or worthy of valuable taxpayer resources.”
Grassley, a high-ranking veteran Republican lawmaker is also a strong advocate for renewable energy, particularly wind power, which makes up 35% of his state’s electrical generating capacity.
The study was scheduled to be completed by mid-June, but as of this writing, there is little to no information on the progress of the report. With conservatives like Grassley and the Edison Institute looking over his shoulder, Trump’s energy secretary may be reluctant to tread on territory that is closely guarded by those who he needs as allies.
Will Trump Spark a Solar Trade War?
In April, Solar Tribune reported that bankrupt Georgia-based solar panel manufacturer Suniva is seeking protection from Chinese competition under Section 201 of the Trade Act of 1974. Under Section 201, the President may impose sanctions to protect American businesses from dumping low-cost products on the U.S. market. A report issued by the Trump administration in March promised a more aggressive approach to unfair international trade practices, including expanded use of Section 201, which the report refers to this as a “vital tool for industries needing temporary relief from imports to become more competitive.” Section 201 was most famously used by the steel industry in 2002 to obtain a three-year moratorium on imported steel.
On May 25th, the International Trade Commission (ITC) informed the World Trade Organization that it is moving ahead with an investigation of Suniva’s claims, indicating that they are seriously considering the case and they will be making recommendations to President Trump on the matter. Section 201 is known as the “escape clause” in the General Agreement on Trades and Tariffs (GATT), which has been in place since the end of World War II and is designed to promote open international trade. Section 201 provides American industries with “global safeguards” against foreign imports from any country that might do “serious damage” to the industry. The president has sole discretion to activate Section 201, despite the very real possibility of economic retaliation by China and other countries affected by the tariff.
Suniva is asking the ITC to make a recommendation to the President that he impose these global safeguards for the maximum statutory period of four years at an initial tariff rate on imported solar cells of $0.40 per watt and an initial minimum price on solar modules of $0.78 per watt. The price floor would decline over the duration of the four-year tariff, but even in year four, panel prices would be near twice their current level, with a rate of $0.33 per watt per and a floor price of $0.68 per watt.
To say the least, this kind of tariff on Asian panels would have a significant chilling effect on the deployment of solar in the United States. Yes, it might save a few solar manufacturing jobs, but that would not come close to making up for the jobs that will be lost if the solar installation business slows down. SEIA’s Abigail Ross Hopper said in a call with reporters,
“There is no job worth saving that is worth putting the other 250,000 at risk.”
Not to mention that providing these types of incentives to U.S. solar manufacturers is not that different from the subsidizing of solar companies like Solyndra by the Obama administration, and that kind of “playing favorites” has drawn immense amounts of heat from Republican opponents of pro-solar policies.
Where Will Trump Go on Solar?
To date, the hallmarks of the Trump administration are controversy and stalemate. Campaign promises to begin building the border wall, institute a travel ban on visitors from the Middle East, reform healthcare and the tax system all in the first 100 days in office have faded into seemingly insurmountable challenges, even with a Republican majority in Congress. It seems hard to believe that anything like a major change in energy policy is even on the President’s viewing screen.
At this point, what seems more likely is that current federal tax credits will be allowed to sunset as expected. The DOE will defund programs like the National Renewable Energy Labs (NREL), but in all likelihood, that work will continue to be done with private funds. Solar will continue to grow, lead by large utility-scale projects racking up major MWs.