Solar panel makers are stepping up U.S. manufacturing, and it isn’t all because of President Donald Trump’s tariffs on imported solar panels.

By Erin Ailworth – The Wall Street Journal

At least three panel companies have announced manufacturing plans in the U.S. in recent months. China’s JinkoSolar JKS -1.94% Holding Co. is opening a factory in Jacksonville, Fla. SunPower Corp. has agreed to acquire struggling panel maker SolarWorld SWVK 14.83%Americas Inc. First Solar Inc. FSLR -0.32% plans to open a new factory in Ohio, where it already has some panel-making operations.

The increases are relatively small compared with U.S. demand for solar panels. But they show momentum in a sector that has been largely stagnant in America. Solar manufacturing is likely to get another lift as demand increases in California, which voted this week to mandate solar panels on nearly all new homes in the state starting in 2020.

First Solar Chief Executive Mark Widmar said the company’s decision to boost U.S. manufacturing capacity wasn’t driven by tariffs, but another change in U.S. policy: the tax overhaul recently passed by Congress and signed into law by Mr. Trump.

Those changes will allow businesses to immediately write off investments in assets, Mr. Widmar said, making manufacturing in the U.S. “much more compelling than it was a year ago.” By adding production in America, Mr. Widmar added, his company also is spending less to deliver panels to U.S. customers than if shipping from Malaysia.

First Solar also has a tariff-related edge over competitors in the marketplace: its panels are made with a thin-film technology exempted from the trade protection.

Imports accounted for 91% of the 10.6 gigawatts worth of solar capacity installed in the U.S. in 2017, according to data from the Solar Energy Industries Association and GTM Research. When fully ramped up, the new U.S. factories being opened by JinkoSolar and First Solar together will be capable of producing 1.6 gigawatts of panels a year.

Tom Werner, chief executive of SunPower, said tariffs were the primary catalyst for his company’s acquisition of SolarWorld Americas, one of the manufacturers that petitioned the Trump administration for trade protection.

Sun Up

The purchase will allow SunPower to revive SolarWorld’s manufacturing operations in Oregon, where the company will produce panels along with panel and cell facilities it already has in Mexico, Malaysia and the Philippines.

“The premium for being an American manufacturer is more relevant than it used to be,” Mr. Werner said. “It’s just so top-of-mind now—more so than before.”

He said he hoped California’s mandate “inspires new home builders across the nation to power their communities with renewable energy.”

JinkoSolar is betting that U.S. manufacturing will be a good bet even when the tariffs expire after four years.

Sebastian Liu, the company’s director of investor relations, said it has sold 5 gigawatts worth of panels in the U.S. in recent years and had been looking to expand its manufacturing footprint into America even before tariffs were on the table.

The company expects to begin panel production in Florida as early as late August and has agreed to supply utility NextEra Energy Inc. with 2.75 gigawatts, or some 7 million panels, over four years.

“The local manufacturing will help Jinko respond to our newest customers’ demands in a quicker way,” Mr. Liu said.

M.J. Shiao, an analyst at Wood Mackenzie, said that while the investments make sense in the current political environment, he questioned the staying power of panel making in the U.S., where the cost of producing a panel, not factoring in tariffs, is about 5 cents more per watt than it is in Southeast Asia.

“We still think there’s a difficult path for these facilities to remain competitive long-term,” he said.

Some solar manufacturers are still weighing whether it makes financial sense to open operations in the U.S.

Archie Flores, vice president of corporate strategy at LONGi Solar, a solar-panel maker, said the current cost of producing panels in the U.S. is similar to the cost added to solar imports by the tariff, due in part to higher labor costs in the U.S.

“Will the U.S. factory still be competitive” when tariffs expire in four years, “or will you wind it down because you can now ship from more competitive locations?” Mr. Flores asked.

Write to Erin Ailworth at Erin.Ailworth@wsj.com

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Escrito por Paul Sampaio

PAUL SAMPAIO CHEDIAK ALVES é professor, locutor, apresentador de rádio e TV, web designer e diretor fundador da REDE SAMPAIO de Televisão e Sites.

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