Shares of Vivint Solar Inc. (NYSE:VSLR) plunged 28.4% in September, according to data provided by S&P Global Market Intelligence, as it became clear that tariffs on solar panels may be on the horizon.
As part of a trade case involving Suniva and SolarWorld, the International Trade Commission has said that the domestic manufacturing industry has been harmed by imports. That means the commission will recommend some sort of remedy, potentially including very punitive tariffs on solar imports that would dramatically raise costs for Vivint Solar and its competitors.
Vivint Solar has been struggling financially even with low solar-module costs, so raising costs by $0.30 or $0.40 per watt, as is being proposed, could severely harm the business. Investors are jumping ship before the final ruling, given by President Trump, comes down early in 2018.
No one really knows what trade remedies will look like, but I think it's becoming clear that Vivint, and companies like it, will take the brunt of the impact. They aren't able to transition their products to international markets, as manufacturers can, and will only see their market shrink. I wouldn't be jumping into solar installers now because they have a lot of uncertainty ahead, given the higher costs likely coming their way.