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Barron's: Trump's New Solar Rules Could Lift These 2 Stocks

Barron's: Trump's New Solar Rules Could Lift These 2 Stocks
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Tuesday, 08 October 2019 09:44 AM

A change in the Trump administration’s tariff rules reportedly could help two U.S. solar companies.

U.S. trade officials said on Friday they were eliminating the exemption for bifacial solar panels from the Trump administration’s tariffs on overseas-made solar products, Reuters said.

The office of the U.S. Trade Representative said in an online statement it was withdrawing the exclusion for imported bifacial solar panels, a new technology through which power is produced on both sides of a cell.

The USTR had announced the exemption in June. Under tariffs imposed in early 2018, the rate for solar panels had been set at 30% and then lowered to 25%.

But two U.S. companies are in a good position to benefit from the Trump decision, Barron's said.

“Asian manufacturers had been ramping up production of the panels with the expectation that there would be a large increase in shipments next year. New tariffs on those products will make them costlier for companies looking to install them, and potentially slow the adoption of solar in the U.S.,” Barron’s explained.

First Solar (FSLR), an Arizona company whose panels are exempted from the tariffs, is threatened by the bifacial panels.

“Bifacial solar panels were expected to be used for ground mount utility projects, which is largely what First Solar’s business is focused on,” Cowen analyst Jeffrey Osborne wrote, according to MarketWatch.

“While First Solar’s panels today are tariff free, it was anticipated that ramping bifacial capacity could lead to intensified competition in the remaining two years of the tariff window on imported solar panels (2020/2021), that could pressure average selling prices and margins.”

To deal with the new tariffs, some solar developers (those who finance panel installation) may want to buy more First Solar panels, Barron’s explained.

SunPower (SPWR), a California company that is the market leader in commercial solar, should also benefit from the new tariffs, which could delay competition.

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A change in the Trump administration’s tariff rules reportedly could help two U.S. solar companies.
trump, solar, rules, stocks
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2019-44-08
Tuesday, 08 October 2019 09:44 AM
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