Report: New Tariffs Should Have Only A Minimal Effect On Solar (With One Notable Exception)

By Frank Andorka, Senior Correspondent

Another day, another set of new tariffs.

In his ongoing attempt to start trade wars with every country around the globe, President Donald J. Trump has decided to impose around $50 billion in new tariffs on products coming in from China. And while initial reports suggested solar modules and cells would not be on the list, Roth Capital Partners issued its guidance on Friday saying they may be included.

And the entire module industry shrugged at the news – with the exception of one module company that is planning on building a new facility in Jacksonville, Florida – which leads to even more speculation on another issue that we’ll get to in a minute.

But first a word about why the new tariffs, though potentially sparking a new trade war with China won’t affect most modules sold into the U.S. market. Put simply, the Chinese module manufacturers doing business in the United States are already sourcing their modules from other parts of their supply chain other than mainland China. As a result, those modules won’t be affected by any new tariffs slapped on those kinds of modules.

As Roth put it in its note:

With the vast majority of the U.S. solar market being served from non-China manufacturing sources due to the 2012 AD/CVD and 201 tariffs, we believe added 301 tariffs on modules and cells may not be that meaningful.

So most in the solar industry can sleep easily knowing this new round of tariffs won’t affect their day-to-day lives much. The one group of executives that may not be sleeping well, however, are those at Jinko Solar.

As we’ve discussed before, Jinko Solar has mildly ambitious plans to start manufacturing modules in the United States as soon as the end of 2018 in Jacksonville, Florida. But that factory was predicated on using Chinese cells in those modules – so the new tariffs might have a detrimental effect on those plans.

Unless.

And here’s where speculation ran rampant over the weekend: As we reported late last week, creditors for bankrupt cell and module maker Suniva finally took possession of the intellectual as well as the physical property of the company from the bankruptcy court, meaning the company may finally really be for sale.

Initial speculation focused on Hanwha Q Cells, which announced last month they would be building a 1.6 GW module factory in Georgia – right in the backyard of Suniva’s old cell factory – would be a logical suitor for the Suniva properties. And while they are still the frontrunner, Jinko Solar might be a dark horse in the race if these new tariffs actually do affect the production and import of solar cells from mainland China.

Keep a close watch on both of those companies as Suniva speculation swirls – it wouldn’t surprise us if a bidding war between the two started for this currently dormant cell production facility.

Pennsylvania Governor Sets Aggressive PACE For Clean Energy Growth In The Keystone State

Harrisburg, Pennsylvania

By Frank Andorka, Senior Correspondent

Yesterday, Pennsylvania Governor Tom Wolf signed legislation designed to open up more clean-energy investment in the state by creating a statewide Property Assessed Clean Energy (PACE) program into law.

PACE is a financing mechanism that enables low-cost, long-term funding for energy efficiency, renewable energy, and water conservation upgrades to commercial or industrial properties through property taxes. This allows businesses to invest in upgrades like renewable energy while paying no money upfront. In states where it’s available, PACE has proven to be a popular program.

As Wolf said in his statement announcing the signing:

This innovative financing mechanism will support the creation of new clean energy and energy efficiency projects throughout the commonwealth, while also enhancing property values and employment opportunities, while lowering the costs of doing business. The implementation of this economic development tool in Pennsylvania is yet another example of the bipartisan work that can come out of Harrisburg when we work together on common sense legislation.

According to Wolf, 33 states plus the District of Columbia authorize PACE financing for clean energy and energy efficiency projects; this includes a diverse group of states such as Alabama, California, Georgia, North Carolina, New Jersey, New York, Ohio, and Texas.

Late last year, Wolf also signed Act 40 into law, which fixed a loophole in Pennsylvania law concerning Solar Renewable Energy Credits, or SRECs. Under old Pennsylvania law, Pennsylvania’s SREC producers could only sell their SRECs within the state, but states outside Pennsylvania could buy into the Pennsylvania market.

This had caused a run on SRECs by out-of-state buyers and plunged the state’s SREC market into chaos, effectively closing down the Pennsylvania market until further notice, since deals became nearly impossible to finance through normal channels. Act 40 closed that out-of-state market loophole, and SRECs in the state are slowly recovering some of their value.

Between closing the SREC loophole and creating this new PACE program, the Keystone State may be on its way back to solar prominence.

Looks Like Suniva’s Finally Up For Sale (No, Really, We Mean It This Time)

By Frank Andorka, Senior Correspondent

It appears Suniva may finally be ready to undergo the sale we’ve all been anticipating for more than a year.

SQN Capital Management, the company’s largest creditor and the one who once tried to get a $55 million payment from the Chinese Chamber of Commerce to make the trade case go away last May, announced that the bankruptcy court has finally awarded it full title to “the cutting edge technology, licenses, and manufacturing capacity” of the company. Which, most solar observers assume, means all that will soon be up for sale.

It’s the only logical outcome for Suniva, which last April filed the trade complaint that would shake the industry to its core and end in January with President Donald J. Trump imposing 30% tariffs on all imported solar modules. It is, of course, a bittersweet outcome and one that stands in stark contrast to what happened to its co-complainant, SolarWorld. I

In its own Cinderella story, SolarWorld was recently purchased by SunPower, who has pledged to keep the Oregon factory open, keep the workers employed and perhaps even hire more. The executives are walking away with golden parachutes and a huge payout. It’s a win-win all around.

Not so with Suniva. There’s been no announced plan to reopen any plants or restart manufacturing in either Atlanta or Saginaw, Michigan. Hundreds of people lost their jobs when Suniva shut down virtually overnight last year, and there hasn’t been any plan that indicates they’ll get their jobs back.

As we’ve talked about before, the Suniva part of this power play has always been about getting SQN its money back come hell or high water. It appears the bankruptcy court has just given SQN what it needed to make that happen for themselves. SQN has been hinting for months that it had a couple of interested parties in what’s left of Suniva if only it could get its hands on all the property from the court. Now they have it.

Let the bidding begin.

Will We All End Up Working For SunPower?: Module Company Launches Battery Partnership With sonnen

By Frank Andorka, Senior Correspondent

SunPower is proving that you can be everything to everybody without trying to be the expert in everything yourself – a business model that could bode well for the company’s future as the U.S. solar industry continues to grow.

First, it purchased mid-tier module maker SolarWorld and announced plans to take over its Oregon manufacturing facility to broaden the scope of its module products. Tuesday, it announced it was selling its microinverter line to industry powerhouse Enphase and converting its AC module line to Enphase inverters instead of continuing to manufacture the products themselves. Which brings us to yesterday and the partnership with energy storage giant sonnen.

“SunPower is the solar industry’s gold standard for superior solar products and services which fits perfectly with sonnen’s leadership in developing intelligent and high performing residential energy storage systems,” said Blake Richetta, Senior Vice President and head of sonnen’s U.S. division, in a press release. “This new program is an ideal marriage between two innovative companies who possess a similar vision to provide premium technology that leads us to a clean and reliable energy future. We are eager to integrate our products and systems with Equinox and offer a premier and comprehensive solution for the growing solar + storage marketplace.”

As with the Enphase partnership, the new sonnen program centers around pairing the company’s energy storage offering with SunPower’s Equinox home solar energy systems. And, much like the deal with Enphase, it’s a partnership that benefits both parties.

SunPower dealers can now offer their customers a full system, from modules to inverters to storage, with no fuss and no muss. sonnen gets U.S. exposure and a built-in distribution system through SunPower’s integrated solar installers’ list.

Quietly, without much fanfare and almost in the background, SunPower is assembling a team that could position it to be the country’s leading solar company before long.

Somewhere, SunPower CEO Tom Werner is smiling.