California Passes Solar Standard and Asia's Sidelined -- for Now

(Bloomberg) -- California just required that solar panels be installed on virtually all new homes starting in 2020. You’d think that’d be great news for some of the world’s largest solar-equipment manufacturers in Asia.

Any new demand for solar in the Golden State is “likely to be met by Asian manufacturers because that’s the center of the solar industry,” said Hugh Bromley, a Bloomberg New Energy Finance analyst. “We expect most solar to be manufactured in Asia.”

But remember that President Donald Trump slapped tariffs on solar equipment imported into the U.S. in January. That’s already slowed shipments to the U.S. And America’s solar installers stockpiled a bunch of equipment last year in anticipation of Trump’s ruling.

That could mute some short-term gains that Asian manufacturers will see from the Golden State’s ruling.

To be sure, Trump’s tariffs phase out after four years. So hang in there, Asia.

“If you’re being forced to install something that you may not want, you’re going to go the cheapest route,” Bromley said. “And that’s likely to be equipment imported from Asia.”

©2018 Bloomberg L.P.

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