Trump Tosses Solar Factories a Lifeline

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THE TOP FIVE

1. Trump throws U.S. solar manufacturers a lifeline

A solar cell at the Elin Energy factory in Texas. Brett Coomer/Houston Chronicle via Getty Images

The Trump administration taketh away, and the Trump administration giveth. A month after President Donald Trump’s One Big Beautiful Bill Act effectively eliminated a key incentive for solar developers to buy domestically-made panels, the White House has announced new tariffs on polysilicon and virtually every component in each step of the photovoltaic supply chain. The trade case originally came before the Department of Commerce when polysilicon makers complained that they couldn’t compete with Chinese manufacturers on semiconductor-grade material without also having a market for the solar-grade stuff. As my colleague Emily Pontecorvo and I reported last night, the administration will impose a 15% tariff on all imports and set baseline prices at which the levies would kick in for each part of the solar supply chain, ranging from $0.22 per watt for solar cells, the actual devices that convert sunlight into electricity, to $0.38 per watt for completed panels. Raw polysilicon, meanwhile, will start at $20 per kilogram. Tariffs have been tried before in the U.S. and Europe to keep out the onslaught of cheap Chinese products and protect domestic manufacturers in the name of national security, but those had only mixed success due to a lack of supply chain visibility. The Trump administration has vowed to try something novel, providing strict oversight over which companies qualify for offsets from the program to prevent Chinese manufacturers from gaming the market.

Still, just a small fraction of the nearly 300,000 Americans who work in the solar industry are in manufacturing. The Solar Energy Industries Association, the solar sector’s largest trade group and a longstanding advocate of importing cheap panels, said the tariffs would only worsen electricity inflation. “America has made terrific progress rebuilding its solar manufacturing base,” Tim Pawlenty, SEIA’s chief executive, said in a statement, “but imposing tariffs and prices floors on solar materials will create new challenges for American manufacturers and raise energy costs for families and businesses.”

2. Another offshore wind developer inks a billion-dollar deal with Trump to kill its projects

Speaking of renewables the Trump administration taketh away: Yet another offshore wind developer has reached a deal with the White House to take a payment in exchange for abandoning a project. On Thursday, the German giant RWE entered into a settlement with the Department of the Interior for $1.2 billion to surrender federal leases for offshore wind projects in New York Bight and off the coasts of California and Louisiana. “After careful consideration, it was determined there is no path forward to permit these projects in the U.S. for the foreseeable future,” RWE said in a press release. “The company determined that this resolution best serves the interests of its stakeholders and allows it to direct resources toward energy projects that can be advanced with certainty.” Noting that this deal is the largest payout yet of any of the agreements the Trump administration has made to kill offshore wind projects, my colleague Robinson Meyer wrote that the price tag is “fittingly” high “because it is among the most damaging” yet. While RWE has pledged to invest in gas projects elsewhere, such as a liquified natural gas export terminal in Louisiana, RWE “well knows” that “these projects won’t help solve a coming energy shortage in New York or New England,” Rob wrote.

3. Virginia’s governor pumps the brakes on the Dominion-NextEra merger

Dominion Energy has long dominated Virginia’s politics as the state’s utility giant and one-time political kingmaker. Now Virginia Governor Abigail Spanberger, a moderate Democrat who soared to victory last year promising to rein in runaway electricity prices, is getting involved in the utility megamerger that could see Dominion join forces with Florida-based NextEra Energy in what my colleague Matthew Zeitlin called a “juggernaut.” In an op-ed in The Washington Post, Spanberger said she had “serious questions about what this deal would mean” and vowed to intervene by formally submitting to become a party in the case to decide whether the deal, which would create a $420 billion behemoth, violates consumer-protection rules. “I know this action is unprecedented by a Virginia governor — but so, too, is the size of this proposed merger and its potential impact on the commonwealth,” Spanberger wrote. “Virginians deserve to know that their leaders are laser-focused on ensuring that their needs are part of” the review by the State Corporation Commission, the regulator that determines whether a utility deal harms ratepayers. The move comes as state regulators order Dominion to create a process for making data centers pay more of the direct costs for their electricity use, such as sponsoring construction of substations to meet new demand, E&E News reported.

On Capitol Hill, meanwhile, Democrats are eyeing new ways to crack down on data centers beyond backing the national moratorium progressive lawmakers proposed. Senator Ron Wyden of Oregon, the highest-ranking Democrat on the Senate’s tax-writing committee, pitched a new excise tax and the elimination of tax breaks for data center construction, NOTUS reported.

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4. U.S. manufacturers can meet inverter demand after FCC ban

By the end of next year, American factories will have enough capacity to produce all the solar inverters the country needs. The U.S. once imported 90% of its large-scale inverters, including more than 30% from Chinese-headquartered vendors. But domestic manufacturers are on track to open more than 100 gigawatts of inverter-making plants by December 2027, according to a new analysis from Wood Mackenzie. The consultancy cautioned that the devices, which patch panels onto the grid, will come at a high premium than today. As I reported last week, the Federal Communications Commission banned new types of foreign inverters on the grounds that they pose a threat to the U.S. grid and the artificial intelligence buildout. “The FCC’s intent here is clear. The US government determined that the U.S.’s reliance on foreign inverters poses a national security risk, citing both cybersecurity and economic concerns,” Joe Shangraw, research analyst at Wood Mackenzie, said in a statement. “Leading manufacturers are notifying clients that they believe their products will not fall under the scope of this ban, while project owners are concerned that their existing inverters could be blocked from receiving critical firmware updates.”

The Pentagon, meanwhile, is canceling plans to award a contract worth up to $300 million for lithium carbonate after twice delaying the deadline for bids, Inside Defense reported. The Defense Logistics Agency gave no explanation for rescinding the solicitation for a five-year, indefinite-delivery deal.

5. Exclusive: Hydro Quebec’s NYC power line is back at full capacity

Last month, New York City’s newly minted clean energy megaproject, a 339-mile transmission line plugging the five boroughs into Quebec’s famously cheap and clean hydroelectric system, went down unexpectedly for maintenance. Just in time for the city’s temperature to go back up, Hydro Quebec’s Champlain Hudson Power Express line completed repairs two weeks ago and started delivering electricity at full capacity again on Thursday, the province’s state-owned utility told me. “We are seeing full capacity flows now on CHPE as we’ve entered a heatwave,” Pete Rose, Hydro Quebec’s senior director of stakeholder relations in New York, told me via text yesterday. “This large volume of clean energy helps suppress wholesale electricity prices while displacing large quantities of CO2.”

THE KICKER

Like Germany itself, BMW’s Munich factory has, uh, seen a lot of changes since its opening in the early 1920s. At each step of the way, however, the vehicles coming off the assembly line ran on petroleum products. Not for long. The company’s oldest manufacturing facility will begin exclusively building electric vehicles starting next year. “This marks a huge turning point for the brand, as it phases out internal combustion models for its Neue Klasse EVs. It isn’t only a production milestone for the brand but a symbolic one,” reporter Nico DeMattia wrote for InsideEVs. “Munich is the site of BMW's HQ and its Bavarian home, and it's about to be fully electric.”