Layoffs predicted as result of tariff investigation, but industry had supply chain issues even before that has delayed the closing of a coal plant in New Mexico
Nearly three-quarters of Colorado’s roughly 350 solar companies predict they will be laying off employees this summer as a result of a federal investigation about tariffs.
In New Mexico, the investigation and other supply chain issues have delayed retirement of a coal-burning unit amid warnings of rolling blackouts spurred by lack of resource adequacy. Colorado utilities have issued no such warnings, but some of those closely monitoring Colorado’s energy transition warn of growing concerns.
First, the tariff issue. Responding to a complaint by a manufacturer of solar panels in California, the U.S. Department of Commerce in March began investigating claims that China was exporting its panels through four other countries in southeast Asia to circumvent U.S. tariffs first imposed under the Obama administration.
A 2021 Washington Post story said that fewer than 1% of solar panels in the United States are being produced domestically, down from 13% in 2004. Conversely, China’s share grew from 1% to 67%.
Mike Kruger, president of Colorado Solar and Storage Association, a trade group, told The Denver Post that these job losses come during a time when “consumer demand continues to be through the roof.”
The tariff issue is part of a more complex issue of supply chain challenges for the solar sector. In February, the Associated Press’s Susan Montoya Bryan reported problems in New Mexico. A utility was “struggling to get enough solar-generated electricity as it prepares to shut down a coal-fired power plant amid supply chain disruptions, one of the problems threatening to delay or cancel projects around the world as pressure mounts to reduce carbon emissions and tackle climate change,” she reported.
The San Juan Generating Station near Farmington was slated to close in June. New Mexico regulators required the Public Service Co. of New Mexico to replace the lost generation with solar and storage — absent the natural gas the company had wanted. The plant was given a 3-month extension, to September.
The Albuquerque Journal on May 12 reported problems beyond September. The tariff and the background supply chain issues threatened the projected power supply for summer of 2023 by Public Service Co. of New Mexico. This raised the specter of potential blackouts in 2023.
Nearly half the 950 megawatts of solar generation and battery storage scheduled to be fully online in New Mexico by early next year won’t be available until after summer 2023.
The company early this year said it was facing potential rolling blackouts this summer and again in summer of 2023, largely because of pandemic-induced supply-chain constraints that set back two solar projects. The continued coal plant operations resolve those issues for this summer, but now comes the tariff investigation.
Nineteen governors, both Republican and Democrat, including Colorado Gov. Jared Polis and New Mexico Gov. Michelle Lujan Grisham, have called on President Joe Biden to hurry the tariff investigation. So did members of Congress, including Democrats in New Mexico and Colorado.
“Additional delays to the four replacement solar projects caused by the uncertainty created by this case will further exacerbate the existing resource inadequacy challenges facing New Mexico,” said the letter from New Mexican.
Also see: Washington Post, “White House alarmed that Commerce probe is ‘smothering’ solar.” And The Hill: “Tariffs won’t build a robust US solar industry.”
Photo: Solar panels in Colorado’s San Luis Valley. Photo/Allen Best
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