In one of the largest visible effects of the Trump administration’s decision to charge tariffs on imported solar modules, SunPower just announced the acquisition of SolarWorld.
The tariffs were announced on January 22nd of this year, but had been anticipated by the industry since Q2 of 2017. The first 2.5 megawatts of imported photovoltaic cells (that are not partially or fully assembled into modules) will be exempt from the tariff, while any additional cells and all solar imported conventional photovoltaic modules are subject to the import tariff. The tariff rate begins at 30% in Year 1 and will fall by 5 percentage points per year, sunsetting after year 4.
SunPower panels are widely recognized as one of the highest quality panels in the market. It’s popular X-series boasts an efficiency of 22.2%, annual degradation rate of 0.25%, half of most of its competitors, and a 25 year product warranty, more than double of most of its competitors.(2) SunPower is an American company founded in 1985. Its first manufacturing facility opened in the Philippines in 2004 with a second opening in Bavaria, Germany the same year. Since then it has also built factories in Mexico.
SolarWorld Americas is the US subsidiary the German Corporation SolarWorld international with its main manufacturing facility in Hillsboro, Oregon. The company signed on to the trade petition led by another company, Sunviva, in May 2017. Sunviva is a US subsidiary of a Chinese solar panel manufacturing. Despite the irony of a German and Chinese company teaming up to close the US market from foreign panels, this acquisition will bail out SolarWorld investors as it teetered toward complete insolvency.
SunPower believes it can save upwards of $2.5mm by relocating a portion of its manufacturing back in the United States. This is predicated on the Trump administration not denying the tariff exemption, which it believes would be “highly unlikely”.(3)