Effects of the Solar Tariff

April 10, 2018

By John Matheny.

On January 22, 2018, the Trump administration enacted a 30% tariff on solar modules (panels) that are imported into the United States. This followed a concerted effort by the solar installation and solar manufacturing industries to stop such a tariff. Opponents of the tariff researched the potential effects and concluded this import tariff will cost jobs. It will slow down the installation of solar, and thus hurt solar businesses, and manufacturers of installation hardware. Remember, modules are only one part of installing solar, there are inverters, wire, racking, flashings, nuts and bolts, all considered “balance of system” components, many of which are already manufactured in the US.

Proponents of the tariff include SolarWorld America and Suniva, both of which did some assembly of solar modules in the US. SolarWorld is owned by a German company, and Suniva, a Chinese company, and both are currently in some form of bankruptcy. SolarWorld America employs approximately 300 people and the company has been bailed out by foreign investors many times. Read more here: greentechmedia.com/article/solarworld-americas-receives-a-5-million-loan

Suniva filed for bankruptcy in April 2017, which set off this quest for action against their competitors (pv-magazine.com/2017/04/18/suniva-files-for-bankruptcy/)

Both petitioned the US International Trade Commission for protectionist action against foreign manufacturers of modules against the warnings of the majority of the solar and renewable industries.

The overall effect of the tariff to home owners is minimal. It has increased the cost of a solar electric system by about 10 cents per watt, about 2.5%, the approximate price of early 2017. The average cost of a residential system is currently $3.50 to $5 per watt. Solar is still a solid investment.

For commercial and industrial scale solar projects (for which the vast majority of modules are installed), 10 cents per watt is a much higher percentage since these systems are usually priced under $2 per watt.

The tariff is set to taper off over the next 4 years, which leads many to conclude that it will do nothing to influence solar module manufacturers to increase their capacity to manufacture in the US and is more punitive than constructive. A tariff is a tax, and this one is both needless and destructive to American workers and the solar industry. It ostensibly protects American interests, but most people can see the true purpose: spreading the falsehood that renewables are too expensive, and fossil fuels are the only way to go.

The truth is: Renewable are the way to go. We have weathered more competent adversaries, and plan on continuing to move toward a sustainable and healthy future. We won’t let a little bit of isolationism get in our way.

Read more on the benefits of Solar