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Workers from GRID Alternatives, a San Diego nonprofit that provides no or low-cost solar rooftop installation to low-income families, install a solar panel at a home in 2017.

Workers from GRID Alternatives, a San Diego nonprofit that provides no or low-cost solar rooftop installation to low-income families, install a solar panel at a home in 2017. (Howard Lipin/San Diego Union-Tribune/TNS)

Third quarter numbers delivered a combination of good news and bad news for the California solar industry, echoing a pattern seen on the national stage as the sector confronts growing pains that include tariffs recently put into place by the Trump administration.

California installed 462 megawatts of solar between July and September - considerably smaller than the 817 megawatts installed in the second quarter. However, the numbers are better compared to the 445 megawatts added in the same quarter of 2017, according to data compiled by the analytics firm Wood Mackenzie and the Solar Energy Industries Association, or SEIA.

Residential solar installations in the Golden State inched ahead of quarterly data reported earlier this year, reaching their highest figure for a three-month period (239 megawatts) since 2016.

"California actually did reasonably well," said Sean Gallagher, SEIA's vice president of state affairs, "and I think one thing that's noticeable about California is we saw a little bit of a rebound on the residential side."

Overall, the U.S. solar market dropped 15 percent year-over-year in the third quarter and additions of utility-scale solar photovoltaics fell below 1 gigawatt for the first time since 2015.

Solar industry officials attributed the dip in large part to 30 percent tariffs placed on imported solar cells and modules in February. Responding to complaints filed by two U.S. solar producers, the Trump administration has argued that foreign competitors, especially China, have flooded the market and unfairly dropped costs.

But large parts of the U.S. solar industry have said increasing the price for solar cells and panels has made customers more reticent to undertake rooftop and utility-scale solar projects.

"If not for the tariffs, the U.S. solar market would undoubtedly look better today than it does now," said Abigail Ross Hopper, SEIA's president and CEO.

The trade organization estimates the tariff will lead to $8 billion in lost investments between 2017 and 2022.

Starting in 2019, however, the tariffs drop to 25 percent and are reduced 5 percent annually until they are scheduled to expire after four years.

In addition, 2019 also marks what is at least scheduled to be the final year solar projects can receive a 30 percent investment tax credit from the IRS. The credit declines in subsequent years, going down to 10 percent in 2022.

The combination of slightly lower tariffs and a potential rush to obtain the full 30 percent tax credit has some analysts expecting an uptick in solar projects.

"Developers originally planning to bring projects online in Q3 2018 were forced to push out completion dates to Q4 2018 or Q1 2019 due to uncertainty around tariffs," Wood Mackenzie analyst Colin Smith said in a statement.

California is by far the nation's leader in solar, with 23,186 megawatts installed. That's five times more than the next biggest state, North Carolina. More than 6 million homes in California are powered by solar.

Wood Mackenzie analysts expect to see California adding another 14,173 megawatts over the next five years.

Policymakers in Sacramento added two programs this year that figure to keep the solar industry growing.

First, Gov. Jerry Brown in September signed Senate Bill 100 into law that calls on the state to derive 100 percent of its retail from clean-energy sources by 2045. SB 100 calls for 60 percent of the state's total power to come from renewable sources such as utility-scale solar and wind by 2030.

Second, the California Energy Commission passed a measure requiring all new home construction include rooftop solar panels. The rule goes into effect at the beginning of 2020.

"We're expecting (the home construction mandate) to create an incremental demand of about 200 megawatts a year over the next four or five years, after 2020," Gallagher said.

Visit The San Diego Union-Tribune at www.sandiegouniontribune.com

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