China's solar subsidy cuts will help US developers to revive projects and jobs, says GlobalData
October 24, 2018 (Investorideas.com Newswire) The move by China in May this year to slash subsidies for domestic utility-scale solar projects will ultimately benefit developers in the US who rely on imported solar panels to revive projects and jobs, says GlobalData, leading data and analytics company.
Solar power developers in the US have been struggling since early 2018 due to two separate policy decisions announced in the US and China. In January 2018, the US government imposed tariffs of 30% on imports of solar products to safeguard the interests of local manufacturers.
Mohit Prasad, Power Analyst at GlobalData, says: "Hit by higher costs of imports, many developers announced cancelation of their projects. Some developers even started negotiations to restructure their power purchase agreements due to higher costs resulting from tariffs."
Utility-scale solar developers like Cypress Creek Renewables, LLC and Southern Current cancelled or deferred projects worth more than $2.5bn.
According to the US Energy Information Administration (EIA), the US solar industry employs more than 250,000 people with about 40% in the installation sector and 20% in the manufacturing sector. Since the majority of them were employed by project developers, the industry started witnessing job cuts after the implementation of import tariffs.
On the other hand in May 2018 China, which has been struggling to build infrastructure to link the solar projects to the grid, announced a cut in the feed-in-tariff subsidy to reduce the surge in solar installations.
Prasad continues: "Subsidy cuts in China have resulted in reduced demand for solar products within the country. Subsequently, the global market is expected to witness an oversupply of solar panels, thereby reducing the prices."
Local Chinese manufacturers are now looking to export more panels, resulting in an oversupply in the global solar photovoltaic (PV) module market, which will further reduce the prices.
As a result, developers such as Inovateus Solar have become more optimistic. The company has closed a deal to develop a 6 megawatt (MW) solar PV plant in the city of Pratt, Kansas. Pine Gate Renewables, a North Carolina-based solar installer, has welcomed the move, since the lower prices will help the economics of projects already in the pipeline.
Prasad concludes: "Following the announcement made in China, many developers will revive their hiring plans and the industry will witness an influx of jobs. So the drop in prices globally and in the US will help developers to revive projects and jobs which were put on hold after the import tariffs levied previously."
For more information
To gain access to our latest press releases: GlobalData Media Centre
Analysts available for comment. Please contact the GlobalData Press Office:
EMEA & Americas: +44 (0)207 832 4399
Asia-Pacific: +91 40 6616 6809
For expert analysis on developments in your industry, please connect with us on:
4,000 of the world's largest companies, including over 70% of FTSE 100 and 60% of Fortune 100 companies, make more timely and better business decisions thanks to GlobalData's unique data, expert analysis and innovative solutions, all in one platform. GlobalData's mission is to help our clients decode the future to be more successful and innovative across a range of industries, including the healthcare, consumer, retail, financial, technology, energy and professional services sectors.
This news is published on the Investorideas.com Newswire - a global digital news source for investors and business leaders
Disclaimer/Disclosure: Investorideas.com is a digital publisher of third party sourced news, articles and equity research as well as creates original content, including video, interviews and articles. Original content created by investorideas is protected by copyright laws other than syndication rights. Our site does not make recommendations for purchases or sale of stocks, services or products. Nothing on our sites should be construed as an offer or solicitation to buy or sell products or securities. All investment involves risk and possible loss of investment. This site is currently compensated for news publication and distribution, social media and marketing, content creation and more. Contact each company directly regarding content and press release questions. Disclosure is posted for each compensated news release, content published /created if required but otherwise the news was not compensated for and was published for the sole interest of our readers and followers. More disclaimer info: https://www.investorideas.com/About/Disclaimer.asp Learn more about publishing your news release on the Investorideas.com newswire https://www.investorideas.com/News-Upload/
Additional info regarding BC Residents and global Investors: Effective September 15 2008 - all BC investors should review all OTC and Pink sheet listed companies for adherence in new disclosure filings and filing appropriate documents with Sedar. Read for more info: https://www.bcsc.bc.ca/release.aspx?id=6894. Global investors must adhere to regulations of each country.