Installations of new large-scale solar facilities fell by close to 50 percent from the second to the third quarter of 2018, according to a recent report that suggests the trade tariffs imposed on China by the Trump administration are taking a toll on the sector.

Such sites are typically large enough to generate 1 megawatt of power, or roughly enough to supply about 165 homes. And with installations of smaller residential solar remaining mostly flat, the solar sector overall saw a 20-percent drop in installations from the second to third quarters and a 15 percent drop from last year's third quarter, which covers the three-month period from July to September.

Consulting firm Wood Mackenzie, which conducted the analysis for the Solar Energy Industries Association, said that "uncertainty" leading up to the Trump administration's decision in January to implement tariffs on imported solar cells and modules is behind the slowdown.

"Abnormally low installation volumes appear to be the ripple effects from projects delayed due to uncertainty surrounding module tariffs in 2017," the consulting firm said in its report. "Developers' uncertainty around the impacts of tariffs on project economics caused Q3 2018 projects to be pushed out to Q4 2018 or Q1 2019."

With tariffs now in place the sector – perhaps counterintuitively – is poised for a moderate bounce-back through the end of 2018. Projects put on hold while developers awaited the details of the tariffs have since been given the greenlight, with the added costs now baked into their prices.

"Developers don't get together and plan them out over the course of a year. So you turn the calendar back and look at when the Q3 projects had to have a go/no-go decision, it was during a time of great uncertainty created by both the tariffs and tax reform," says Abigail Ross Hopper, president and CEO of the Solar Energy Industries Association. "Once those things were known, tax reform in December and tariffs in January, it relieved that uncertainty in terms of what the marketplace looked like. That's why we'll see a lot more projects built in Q4."

However, analysts expect to see the development pipeline slow again in 2019. Though some projects slated to be completed at the end of 2018 will spill into the first part of next year, solar installers will be forced to weigh two competing incentives: a federal 30 percent investment tax credit that's set to decrease in value in 2020 balanced against tariff prices that are set to see a slight cut in 2020. Wood Mackenzie expects most developers will delay new projects next year – and forgo the full 30 percent tax credit – in exchange for the cheaper tariff in 2020.

As a result, "2019 will be the year most heavily impacted by tariffs," the analysis said. Residential, by contrast, might see "a more robust rebound in 2019," bolstered in part by California's new mandate requiring solar on nearly all new housing.