Bill Halter was out in the sunshine Wednesday in Clarksville, looking over the state's largest municipal solar array and smiling despite the reality of new American tariffs on imported solar modules.
Halter, a former Arkansas lieutenant governor and CEO of Scenic Hill Solar of Little Rock, had just dedicated a 20,000-module array for Clarksville Light & Water Co., a $10 million project his company had brought in six months ahead of schedule and on budget.
"I'm standing here on a bright, sunshiny day, and 4 megawatts of power are being produced even as we speak," Halter said after a ribbon-cutting event at the new Clarksville plant, which is expected to save city utility customers $500,000 a year while cutting carbon emissions.
"It was a spectacular event," Halter said, "with a lot of energy, a lot of community involvement and $100,000 in charitable contributions" from solar power project participants and members of the community.
But Halter was also eager to provide some context and business nuance to the discussion of Monday's decision by the Trump administration to apply a four-year tariff on solar imports. The tariffs will start at 30 percent and decrease by 5 percent yearly until the duties stand at 15 percent in 2022.
"My first observation is that there's no question that when you put a tariff on modules you raise the cost of all these solar projects; there's no disputing that, that's math."
But for Scenic Hill, which has focused on industrial projects for L'Oreal and municipal-scale work like the Clarksville project since the company's founding in 2015, the tariff impact may be muted. Halter has no doubt that the $20 billion domestic solar industry will feel negative effects. After all, it relies on imports — many from China — for 80 percent of its solar module supply.
"When you raise price projects, there will be some that no longer pencil out, that are no longer economical," Halter said. "But for Scenic Hill and the scale of projects like those at L'Oreal and Clarksville, even with the tariffs factored in these are high-return investments for our clients. The tariff will lower the return, but the return is still high."
U.S. Trade Representative Robert Lighthizer said the duties were needed to protect American manufacturers from cheap imports. "The Trump administration will always defend American workers, farmers, ranchers and businesses," Lighthizer said. But Halter said the realities of international trade are not quite that simple.
"You can look the numbers up, but of the hundreds of thousands of U.S. solar industry jobs only a few thousand are in the manufacture of modules," Halter said. "Nobody questions that the Chinese were being allowed to dominate the market, but that went on long enough for nearly every manufacturer of modules in the U.S. is out of business. Only a few remain, and they're all sold out of modules for a year.
"A better policy than the tariffs would have been to deal with this trade misbehavior earlier."
Scenic Hill saw the tariffs coming, Halter said, and alerted its customers and potential customers to the potential effects. "From a business perspective, we've already been mitigating the impact. We have re-run all of our models and recalculated proposals, and this is still a strong investment. We assess projects' economic viability very early in the process of talking to customers. If a project's not viable, we politely tell people we'll be back to them when it becomes viable."
The Clarksville project gives Halter a healthy example to point to. Under its agreement with Clarksville Light & Water, Scenic Hill Solar owns and operates the plant and will sell the "cheaper, cleaner energy" to the utility for the next 28 years. CLW also has an option to buy the solar plant from Scenic Hill in eight years.
John Lester, the Clarksville utility's general manager, said the project is more than a money-saver, describing it as a forward-looking partnership that puts Clarksville in a position to help businesses further their energy sustainability goals. "As a municipal utility we have the flexibility to be able to provide a 100 percent renewable supply to potential new business," he said.
The power plant is expected to generate more than 11 million kilowatt-hours of electricity in its first year, about 25 percent of the utility's residential load.
"We're proud to partner with CLW on a power plant that reduces costs, provides future price certainty for their electricity, reduces emissions, employs local workers and gives Clarksville its first local generating resource," Halter said in remarks prepared for the ceremony. "We are also thrilled to announce that solar power project participants are joining together to contribute $100,000 to local charitable organizations."
Recipients include the Johnson County Imagination Library, the Augsburg Food Bank, Finding Hope, Heroes on the Water and Union Rescue Mission.
A $65,000 donation to the library came from the Shanti and Bill Halter Charitable Fund, U.S. Bank, Arkansas Community Foundation, Hardwicke Funeral Home, Johnson County Health & Rehab, Bird's Hospitality, Mustard Seed, the University of the Ozarks, the Dunsworth Family, Wade Black, First National Bank, and Roller Cox. DEPCOM Power made contributions to the food bank, Finding Hope, Heroes on the Water and the rescue mission.