The U.S. solar industry let out a collective sigh of relief after trade commissioners proposed import tariffs that were less than half what a bankrupt U.S. panel maker is seeking in a closely watched trade case.

The U.S. International Trade Commission recommended tariffs on imported solar panels of as much as 35 percent during a hearing Tuesday. The independent agency will send its proposals to President Donald Trump, who faces a January deadline to make the final decision.

The tariff proposals are lower than requested by Suniva Inc. The Georgia-based manufacturer filed the trade case in April, and was seeking tariffs of 32 cents a watt for panel imports, about equal to the current average price. Other U.S. solar companies had been bracing for higher duties, which they said would have disrupted the $29 billion industry, stifling installations and triggering job cuts. Some developers were already stocking up on inventory in anticipation of higher costs and halting construction on projects because of pricing uncertainty.

“That’s below the price that people have been hoarding panels for,” said Jeffrey Osborne, an analyst at Cowen & Co. “On the demand side, jobs cuts won’t be as bad as feared, but on the manufacturing side, job creation won’t be as big. This would have a limited effect.” 

Imported solar panels for large solar farms are forecast to remain around 32 cents per watt in the U.S. next year, excluding the impact of tariffs, Bloomberg New Energy Finance analyst Nathan Serota said. A tariff of 30 percent to 35 percent would tack on 10 to 11 cents, putting modules at the same cost developers were paying in September 2016. That’s significantly less than developers had feared.

“Nobody likes to pay more for their products,” Serota said. “But it’s hard to see how much better of an outcome the industry reasonably could have asked for.”

The agency, which voted unanimously in September that U.S. solar manufacturers were being harmed by cheap imports, was divided on what to recommend to Trump. He has wide discretion to adopt one of the commissioner’s recommendations, do something else altogether, or nothing at all. His deadline for a decision is Jan. 12.

Chairman Rhonda Schmidtlein proposed tariffs of 35 percent on solar panels and as much as 30 percent on solar cells, beyond an initial quota that would face lower duties. Two other commissioners jointly proposed a 30 percent duty on cells beyond 1 gigawatt of imports. In both cases the duties would last for four years and decrease in regular intervals. The fourth commissioner recommended import quotas of 8.9 gigawatts for the first year, increasing by 1.4 gigawatts annually over the same period.

Suniva said the proposals were “disappointing.” The company has argued that tariffs are needed to protect the U.S. solar manufacturing industry. Suniva has been joined in the case by the U.S. unit of bankrupt German panel maker SolarWorld AG, which echoed those concerns.

Manufacturing ‘Extinction’

“The ITC’s remedy simply will not fix the problem the ITC itself identified, and with it, we’ll see very shortly the extinction of what remains of this manufacturing sector,” Suniva said in a statement.

Solar shares in New York didn’t move much on the news, with the exception of First Solar Inc. The biggest U.S. solar manufacturer uses a different technology and its products are exempt from the trade dispute. Analysts have said the company stands to gain the most from tariffs, and it slumped 8.6 percent to $55.22 at 1:45 p.m. in New York after the ITC hearing.

The ITC “recommendations demonstrate Suniva’s request was not permissible under law,” Ed Fenster, chairman of the rooftop solar company Sunrun Inc., said in a statement. “We believe the administration will go the next step, look past the narrow legal lens of this process and see what is plainly visible: the best move for America’s workers is to reject entirely this bail-out of two bankrupt companies.”