KBRA’s report warned that the Commerce Department’s Investigation of Solar Component Manufacturers is likely to have a negative impact on the sector. The probe, announced in March 2022, will look at whether Chinese companies are circumventing U.S. tariffs by moving the manufacturing of solar panels and components through Southeast Asia. The threat of retroactive tariffs has effectively halted imports of crystalline silicon panels and components from Cambodia, Malaysia, Thailand, and Vietnam, KBRA said. These four countries are estimated to provide over 80% of the most popular type of solar modules used in the U.S.
The KBRA report said the Consolidated Appropriations Act 2021, signed by President Donald Trump in December 2020, benefited homeowners by re-extending the federal solar investment tax credit (ITC) by two years. This continued to make the ownership of solar PV systems more affordable and provide a meaningful potential source of repayment for residential solar loans, KBRA said. Further extensions, the report said, will depend on which administration is in office at the time.
KBRA believes the installation of solar panels will increase the value of houses and affect underwriting decisions, pricing, and policy terms and conditions.
The report said the U.S. decision to rejoin the Paris Agreement on Climate Change provides a loud endorsement by the federal government for all renewable energy initiatives such as solar power, at least under the current administration.
Tax legislation is not likely to be a huge consideration for insurers, KBRA said, but the underwriters will be aware of how tax incentives drive homeowner behaviors. And, while European regulatory frameworks for insurers have been focused on solar and other climate change initiative for a longer period of time than their U.S. counterparts, the U.S. is ramping up its frameworks at the state and federal levels.
