An international dispute over tariffs on solar panels is casting uncertainty over the nation's growing solar power sector, and it's slowing Maine's aggressive efforts to ramp up renewable energy resources.
The U.S. Department of Commerce is investigating whether tariffs are violated when solar modules using parts from China are assembled in countries such as Cambodia before shipment to the U.S.
If so, heavy penalties on solar products could be imposed retroactively to the day (last month) the investigation started. Developers in Maine are putting major projects on hold, maybe for good.
"It's just going to make the projects unworkable," said Robert Cleaves of BNRG Dirigo. He expected to start work this year on solar projects in Eddington and Augusta worth $50 million. But they're at risk now, he said, because if imposed penalties as high as $200% could add tens of millions of dollars to the cost. Under a contract with the state, the plants would deliver electricity for 2.9 cents per kilowatt hour — a fraction of the current going rate.
"It couldn't come at a worse time not only for developers but also for Mainers facing rate shock as a result of increasing natural gas prices," Cleaves said.
An national industry survey finds that projects at risk in Maine alone represent 220 megawatts of capacity — more than what was installed here in the record year of 2021. Nationally more than 50,000 megawatts of planned capacity may be at risk. Solar power advocates say President Biden should step in or risk his own climate agenda.