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President Donald Trump holds up one of the Section 201 actions that he signed during a ceremony in the Oval Office of the White House on Jan. 23, 2018.Carolyn Kaster/The Associated Press

The booming U.S. solar power industry warned that President Donald Trump's decision to slap tariffs on imported panels will drive up prices and cost jobs, but it said it will not stop the industry's growth.

Days before jetting off to the World Economic Forum sessions at Davos, Switzerland, the U.S. President approved a 30 per cent tariff on panels and components that are primarily shipped from Asia. The tariff will be applied after a quota is hit and will decline substantially over four years.

The punitive trade action will help a few struggling U.S.-based solar panel makers but have a negative impact on other manufacturers who supply the industry, said Abigail Ross Hopper, president of the Solar Energy Industry Association in Washington.

"We think this is not the right move for the U.S. economy, not the right move for U.S. energy security, and not even the right move for U.S. manufacturing," Ms. Hopper said on a conference call on Tuesday. The association forecast the tariff would cost 23,000 jobs in the solar sector.

However, others are more sanguine.

The added costs will be particularly burdensome for the utility-scale projects that get lower prices for their energy and incur high capital costs. Analysts say the impact ranges from a 10-per-cent tax at the high end for utility-scale projects, down to 3 per cent for rooftop installations that can charge a higher price-per-watt.

As a result, companies that deal in rooftop solar panels or commercial projects will be better able to absorb the blow.

"I don't think the impact will be significant," John Berger, chief executive officer at Houston-based Sunnova Energy Corp., said in an interview. "It's more like a speed bump."

He noted panel prices rose last year as suppliers and customers anticipated the tariffs, which turned out to be less severe than many in the industry had feared. That's because the quota for tariff-free panels is higher than expected, and the phase-out is quicker.

Guelph, Ont.-based Canadian Solar Ltd. has shifted much of its production and sales to Asia, but still has significant business in the United States. The company declined to comment on Tuesday.

Canadian Solar "does not have production domestically [in the United States] so all of their sales are subject to the tariff," Jeffrey Osborne, analyst with New York-based Cowen and Company, LLC, said on Tuesday.

Mr. Osborne and his colleagues said the resolution of the case may even provide a lift to the solar market by eliminating uncertainty.

Concerns over pending tariffs "caused an acute slowdown in activity over the last two quarters, and we would expect the clarity of the decision will allow activity to resume as the cost declines in other areas of the solar value chain are more than likely to offset this tariff over the next 12 to 18 months," they wrote in a note.

Renewable-energy advocates worry the Trump administration has taken another shot at the clean-power sector while championing coal-fired electricity.

Solar energy costs have fallen dramatically and the sector now competes head on with coal and natural gas, though it requires backup from either gas or energy storage system like advanced batteries. The solar-energy industry fared well under the Republican tax legislation passed in December, which maintained the 30 per cent renewable energy tax credits that many had feared would be lost, while lowering the corporate tax rate and enhancing the depreciation schedule for solar investments.

Analysts said the tariffs had less to do with environmental issues, and more to do with the U.S. President's "Make America Great Again" protectionist agenda that he touted in the 2016 election campaign.

The tariff case resulted from pleas for protection from Suniva and SolarWorld, two bankrupt panel manufacturers that are based in the United States but have foreign ownership.

"The administration appears to have used those firms' petition as a way to enact tariffs that demonstrate its commitment to upholding promises of America First trade protectionism," said Dr. Varnum Sivaram, a senior research fellow at Columbia University's Centre for Global Energy Policy.

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