Solar Tariffs: It Could Have Been Worse

Solar cells imported into the United States will now face a tariff. That’s the bad news. The good news is that it could have been worse.

Here comes the most “dog bites man” news flash of all time. Ready? The President of the United States made headlines this week.

President Trump concluded the Suniva and SolarWorld tariff petition process by imposing a tariff on silicon solar cells and modules that are imported into the United States. That’s the bad news. The good news is that it could have been worse.

I’ve written about this situation before, see parts one and two if you want more of the backstory. And, you can find additional details on the tariff here, but I can give you the highlights as well. The tariff is for four years, and it starts at 30%, declining 5% per year to 15% in the last year. The first 2.5 gigawatts of imported solar cells are exempt from the tariff.

When the International Trade Commission recommended a tariff to the White House a couple months ago, the commissioners’ recommendations were slightly more severe. One commissioner suggested a 30% tariff on solar cells that declined by 1% per year for four years. Two others sought a 30% tariff on solar cells declining by 5% for four years (as the White House decided), but with a 1-gigawatt exemption amount. The fourth commissioner recommended a quota, outright restricting the gigawatts of solar cells that could be imported.

See! Could have been worse.

Look, it’s still unfortunate. The decision will cause more jobs in America to be lost than gained, simply because the majority of solar jobs in America are in the installation of panels, not the manufacturing of them. With an artificially higher price, fewer panels will end up being installed over the next four years.

Even still, this article by Bloomberg suggests the impact on installed prices won’t be crippling. According to Hugh Bromley, one of their analysts, the tariff will “increase costs for large solar farms by less than 10 percent and for residential systems by about 3 percent.” The reason is because solar cells make up only a fraction of the total costs to install solar panels.

If I’m a betting man, and I admit that I am, I would bet that declining costs in solar will continue to make it the smart play for our long-term energy future. Even though American solar energy did just have a protectionist tariff slapped on it, the last time I checked, the Sun was still blasting the Earth with free electrons on a daily basis. Fear not, fellow fans of a future with fossil fuel free energy (hehe, alliteration), solar still looks bright (hehe, pun).

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John Anderson Lanier is the Executive Director of the Ray C Anderson Foundation. Serving in this role has been an immense honor, and he feels privileged to work with his family to advance the legacy of Ray, his grandfather. Lanier’s passion for environmental stewardship was sparked by Ray’s example and story, and he never tires of sharing this story with others.