SCHENECTADY COUNTY — Schenectady County wants to be energy-independent by the end of 2020, but a new federal tariff on foreign-made solar panels is raising fresh questions about that goal.
"I'm concerned," County Attorney Chris Gardner said. "I think we'll see a bigger impact as we go out for the (request for proposals) on doing countywide solar."
Gardner, who has been instrumental in negotiating a solar development deal between the county and Monolith Solar Associates of Rensselaer, said he thinks a Trump administration move to raise tariffs on solar equipment could slow development of solar energy projects across the country, but it won't stop it.
"It could increase the cost of the solar panels, but there are a lot of other costs involved," he said.
The county is already producing the equivalent of 60 percent of the electricity it uses from solar panels. But it is also in the early stages of seeking proposals to expand access to solar projects to individual towns — the effort for which the requests for proposal are being crafted now.
Monolith President and CEO Michael Hickey said Monday that he doesn't foresee the major job losses some in the solar industry are predicting. The cost of producing solar electricity has been dropping dramatically in recent years, he said, and prices frequently fluctuate anyway. Also, some people in the industry had feared the new tariffs would be higher than they are.
"It's one of those things where there's a lot of smoke now," Hickey said. "I'm actually of the feeling we won't see much of an impact."
Monolith, which has about 125 employees, does most of its business in New York state and has inked deals similar to the one in Schenectady County with other local municipalities. Hickey said he he doesn't see those plans changing, thanks to relatively small impacts — probably around 10 percent — on solar equipment prices.
"There's conscience about clean energy. There's just being a good citizen, contributing to energy independence and to a clean environment," he said.
The tariff, imposed Jan. 23 on solar panels imported from cheap-labor Asian countries such as South Korea and Malaysia, has sparked controversy. While the intent is to support companies that make solar panels in the United States, firms that install solar panels and solar farms — a much larger segment of the industry — say it could hike their costs, kill projects and make it harder to compete.
"While tariffs in this case will not create adequate (solar) cell or module manufacturing to meet U.S. demand ... they will create a crisis in a part of our economy that has been thriving," said Abigail Ross Hopper, president and CEO of the Solar Energy Industries Association.
The Trump-imposed tariff starts at 30 percent in 2018. It then drops to 25 percent in 2019; 20 percent in 2020; and 15 percent in its final year, 2021. The first 2.5 gigawatts of imported solar cells are exempt from the tariff each year — a number high enough to limit the impact, Hickey said.
He added that the U.S. doesn't have the capacity to meet the demand for solar panels, and he's not aware of any plans that would change that. Worldwide, there's a glut of solar panel manufacturing.
"Right now, there's an over-capacity issue in the industry that should hold prices down," he said.
Schenectady County has a multiyear deal with Monolith, which installs panels at its own cost and then sells the electricity to the county at a discounted rate. Monolith pays the cost of installing the solar farm and gets federal and state tax credits for doing so, while the county gets to purchase cheaper power.
The most recent specific deal, approved by the county Legislature earlier this month, will bring the county's total solar power purchases to nearly 4.3 megawatts annually. Monolith has installed solar panel fields on three county-owned properties since 2015, and planning is underway for another solar farm at the former L & M Motel site in Rotterdam.