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On January 22, the Trump administration shook up the U.S. solar industry. The administration announced a 30% tariff on solar panels manufactured overseas.
According to CNBC, “A 30 percent tariff would be applied to imported solar modules and cells in the first year. In the subsequent three years, that number would decrease to 25 percent, then 20 percent and then 15 percent.”
About 5% of the solar panels in the United States are manufactured here. The rest are imported mostly from Malaysia and South Korea.
But manufacturers aside, how is the rest of the United States solar industry – which accounts for about 370,000 jobs – reacting to the proposed tariffs?
A Boom In Installations
The Trump administration says that the new tariffs are largely directed at China.
Over the last decade, China has worked hard to become one of the world’s leading manufacturers of solar panels. The result? A flood of low-cost panels hitting the U.S. market.
The ready availability of less-costly Chinese solar panels hit American manufacturers hard. The problem got so bad that in May of 2017 American manufacturer Suniva filed a trade petition asking for protection from cheap imports.
The U.S. International Trade Commission later ruled in Suniva’s favor, setting the stage for the new tariffs.
Costlier Panels Means Fewer Installations
But while many U.S. manufacturers are cheering the tariffs, the industry as a whole is not.
The Solar Energy Industries Association (SEIA) is one trade group that’s concerned. That’s because most jobs in the American solar industry aren’t manufacturing positions. Instead, they’re jobs related to installing and servicing solar panels (electricians, cable pullers, equipment operators, etc.).
Tariffs mean that the cost of foreign-made solar panels will rise. And a rise in the price of materials means that customers won’t be able to afford to purchase and install as many panels for their upcoming solar projects as before.
The SEIA fears that tariffs could cost 23,000 jobs in 2018, and also cause the delay or outright cancellation of “billions of dollars in solar investments.”
Suvi Sharma, the CEO of Solaria (a company that manufactures solar panels in both the United States and South Korea) worries that the shift in trade could give solar a disadvantage in the energy market. “With a high tariff, there is going to be more manufacturing of solar in the United States,” he said. “but the question is, at what cost?”
Sources: CNBC, SEIA, Gizmodo, Manufacturing.net, The New York Times, Wikimedia Commons
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