Standard CEO calls for ITC extension

A hangover is looming for the booming US solar industry, with tariffs on Chinese modules set to push grid parity out by at least several years, warns the chief executive of Standard Solar.

Tony Clifford, chief executive of Maryland-based Standard Solar, says the US solar industry would need "a minimum" two-year extension of the 30% Investment Tax Credit (ITC) to counteract the duties recently slapped on Chinese and Taiwanese PV kit on a preliminary basis.

The duties may be finalised later this summer.

Compared to the US wind industry, which has been handicapped by the on-again-off-again Production Tax Credit, the US solar industry has been in the enviable position since 2008 of having had the 30% ITC in place through the end of 2016 – an exceptionally long period of certainty by the standards of US renewables.

The ITC is set to drop to 10% after 2016. Many in the industry have assumed that ongoing cost reductions would allow the sector to continue thriving after that happens.

But the preliminary tariffs recently announced have upended the equation, says Clifford.

Standard Solar is one of the largest PV installers based on the US East Coast, having installed nearly 100MW to date.

“In 2012, I was optimistic that by the end 2016 we would have reached a tipping point,” said Clifford, speaking Monday at the launch of the PV America conference in Boston. “Now I’m pessimistic.”

At the time of his optimism – spring 2012 – top-tier Chinese modules could be purchased in the US for $0.80-$0.85/W, and analysts were forecasting prices of $0.55-$0.60/W by the end of 2014, Clifford says.

In reality, modules are currently selling for $0.74-$0.78/W in the US, and “are likely to go up” once a separate anti-dumping investigation is concluded. “You can’t get long-term supply contracts [in the US] right now," Clifford says, with the supply chain in a state of "confusion".

Meanwhile, Standard Solar recently got a quote in Mexico from a tier-one Chinese module supplier for $0.62/W. “That looks like a tariff of $0.12-$0.16/W on the US solar industry as of today.”

Given that additional cost, Clifford says the US industry would likely need a two-year extension to the ITC, to the end of 2018, to hang onto its momentum.

“I fear that in spite of our years-long, across-the-board efforts to reduce hard and soft costs, the solar industry may wake up on January 1 of 2017 with a huge hangover and a not-quite-competitive cost model.”

California-based SolarCity, Standard Solar’s largest rival, recently announced plans to begin building module factories of its own in the US – a risky move, but one which if successful could give it a critical advantage over installers left buying modules on the open market.