Despite worries that new tariffs on imported solar panels could cost thousands of American jobs, several Utah companies say they expect only minimal losses.
Analysts are projecting an 11 percent decline in solar-industry employment nationwide as a result of the new tariffs, which President Donald Trump signed into law on Monday. But Utah should be insulated from that impact by the strong demand for solar installations in the state, said Ryan Evans, president of the Utah Solar Energy Association, an industry trade group.
As with the rest of the nation, Utah’s solar installers rely heavily on supplies of foreign-made panels, so the new 30 percent import tax will likely increase costs. That, in turn, could sour some customers who planned to buy solar arrays based on the assumption that savings on their power bills would offset their initial investment.
“It’s not great news,” Evans said. But industry officials are estimating average cost increases of 5 percent due the tariffs, he said, “so it’s not horrible.”
In emerging markets, a 5 percent hike could be a deal breaker, Evans acknowledged. But Utah has already shown robust demand for residential solar arrays, and many companies have matured to the point where they can absorb a modest bump in costs without resorting to significant price increases to consumers — or layoffs.
“We won’t continue to add jobs,” Evans predicted, “but I think there will be only minimal job losses here at the state level.”
Utah companies have a unique advantage over other states, in that customers are often attracted to solar power for reasons other than cost savings, said Kelly Curtis, CEO of South Jordan-based Solaroo Energy. Many are also drawn to solar out of concerns about air pollution, he said, or because they want to be able to generate their own electricity in the event of an emergency.
At least one Utah-based company, Auric Solar, predicts continued growth in the Beehive state despite the tariffs, thanks to that demand. Company CEO Jess Phillips said a 50 percent increase in company revenue last year alone prompted Auric Solar to open new offices in Denver and Portland, and it is still moving ahead with a third new office in Fresno.
“We don’t have plans to downsize anything,” Phillips said. “We’re still looking for talent constantly.”
While Fresno was an obvious place to expand due to California’s high electricity prices, solar sales are also strong in Utah, Idaho and Colorado, he said, despite relatively lower power rates in those states.
The Wasatch Front — like Denver and Boise — is a fast-growing, tech-oriented, youthful community that continues to drive solar growth, Phillips said.
And while smaller Utah companies may have more difficulty absorbing new costs, Curtis, with Solaroo Energy, said “we’ll be fine.”
“We’re disappointed—we don’t agree with” Trump’s decision, Curtis said. “But solar is moving on — it’s just a bump in the road.”
While some solar panel brands may cost more, Curtis said, other manufacturers have signaled they do not plan to charge more for their panels. So Solaroo might have to raise its prices, he said, or it might seek out new suppliers to avoid a price hike.
“The more we increase solar prices here, the more it will hurt,” Curtis said.
Those effects could be magnified for larger-scale installations, such as commercial and utility-scale solar arrays, said Doug Shipley, CEO of Intermountain Wind and Solar, based in Woods Cross. Profit margins on those large projects are significantly slimmer than those on a residential rooftop installs, Shipley said, and so commercial installers will be less able to absorb the tariffs.
But even for commercial projects, Shipley said he doesn’t expect to see a large price spike or slump in demand. Trump’s announcement didn’t come as a surprise, and many solar distributors have been inching their prices higher for nearly a year in anticipation. So some solar panels are already selling at prices already adjusted for the tariffs.
And even if prices do inch upward, Utah has successfully weathered solar price fluctuations in the past, Evans added. And the industry in Utah is more upbeat about its prospects this year, thanks to last summer’s settlement between solar supporters and Rocky Mountain Power, Utah’s largest provider of electricity.
The regional electrical utility had wanted to impose new fees on residential customers with solar panels, but ultimately agreed to preserve most of its original rate system, which provided customers with “net-metering“ credits on their power bills when they generate excess electricity.
“We’re on pretty stable ground, finally,” Evans said. “Whether it’s the best ground, we have yet to see.”