U.S. regulators are considering a request to impose tariffs on solar modules and panels imported from Southeast Asia, an effort solar energy advocates say would choke industry expansion and threaten the growth that Arkansas has experienced over the past five years.
The U.S. Commerce Department is considering a petition seeking additional charges for solar components imported through Malaysia, Thailand and Vietnam.
Commerce Department officials are evaluating whether to open an investigation that could lead to tariffs ranging from 50% to 250%, according to the Solar Energy Industries Association, a national lobbying group rallying the industry to fight the effort.
"These tariffs, which are currently under consideration at the Commerce Department, would be a serious blow, perhaps a fatal blow, on the broader U.S. solar industry," said Abigail Ross Hopper, president and chief executive officer of the industry group.
Arkansas solar executives are monitoring the issue and note that added costs could stall solar's continued growth in the state.
"This will hurt the industry if for no other reason than it will create uncertainty around pricing," Heather Nelson, chairwoman of the Arkansas Advanced Energy Association, said Wednesday. "I don't think this kills job growth but it certainly could slow it down."
Likewise, Bill Halter, chief executive officer of Scenic Hill Solar of Little Rock, said the tariff issue would add costs for solar providers since modules are the single-largest cost in a project.
"There is a consequence in the market already for some existing tariffs and restrictions and if the additional restrictions were added to imports ... that would have a very dramatic effect on the pricing of modules in the United States," he said. "The whole market would move up to that post-tariff price. You would definitely have price increase for projects overall."
U.S. Sen. Jacky Rosen, the Nevada Democrat who is chairwoman of the Senate Subcommittee on Tourism, Trade, and Export Promotion, announced Wednesday that she is rallying Senate colleagues behind a letter urging Commerce Secretary Gina Raimondo to assess the validity of the anonymously filed petitions to expand the tariffs. The letter was signed by 11 other senators, none from Arkansas.
"We are writing to express our concerns with recent, anonymous petitions alleging illegal trade activity filed with the Department of Commerce that would have a devastating impact on the U.S. solar industry and American solar jobs," the letter said. "Given the significant negative effects of imposing new tariffs on imported solar products, we implore you to carefully assess the validity of these petitions ... and determine whether it is appropriate to initiate an investigation into this matter."
In Arkansas, solar electricity generation has boomed, growing from 18.2 megawatts in 2015 to more than 380 megawatts last year. The association projects usage will reach more than 520 megawatts this year and surpass 1,000 megawatts by 2023.
On the employment front, the Arkansas energy association says solar-related jobs have increased by 23% statewide over the same time period, providing employment for more than 300 Arkansans.
New tariffs would "cripple the U.S. solar industry and ruin America's plans to tackle climate change," according to the national solar industry association.
In a separate letter to Raimondo, more than 190 U.S. solar companies urged the Department of Commerce not to initiate a trade investigation.
The industry, which is asking the Commerce Department to dismiss the petition, says tariffs would slash the use of solar in the U.S. by nearly a third over the next two years. The move also would strangle job creation for solar projects, cutting an estimated 45,000 jobs from 2023 projections.
"We cannot emphasize enough how damaging these tariffs would be to our companies and the entire American solar industry," the letter said.