Commentary

Solar Industry, Consumers Brace For Impact Of Hefty Tariffs

The Trump Administration’s announcement Monday that it will impose tariffs on solar cells and modules manufactured in other countries has consumers fretting about the probable higher cost of buying a system, clean energy advocates up in arms about the perceived blow to an increasingly viable alternative to fossil fuels and installers warning that the decision will stall the industry’s growth and cost Americans jobs.

Or not. 

In a Twitter thread filled with data such as the growth of solar as the price of panels has come down, Now!Solar partner Eugene Wilkie tweeted Monday: “As a solar company, we are devastated to learn Trump has imposed a 30% tariff on solar panels virtually killing the solar industry. Solar employs more people than coal and oil combined. Today's decision will cause the loss of roughly 23,000 American jobs this year.” 

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The Kennewick, Wash.-based installer also predicts that the move “will send the price of solar panels surging and halt hiring in an industry that has grown 17 times faster than the U.S. economy.”

“The tariffs are the latest action by Trump to undermine the economics of renewables. The administration already decided to pull the U.S. out of the Paris Agreement on climate change, sought to roll back Obama-era regulations on power plant emissions and signed sweeping tax reforms that constrained financing for solar and wind. The import taxes are the most targeted strike on the industry yet and may have larger consequences for the energy world,” Brian Eckhouse, Ari Natter and Chris Martin point out for Bloomberg.

But the hed on Patti Domm’s story for CNBC reads: “Tariffs on washing machines and solar panels not ‘declaration of war’ and don't spell end of trade deals.”

USA Today’s Paul Davidson observes that “some U.S. manufacturing advocates say worries about soaring prices are overblown and the administration’s gambit will ultimately create more jobs than it destroys as Trump moves to back up his ‘America First’ credo.

“You’ll see more manufacturing workers in more states making more products with more innovation and R&D,” Scott Paul, president of the Alliance for American Manufacturing, tells Davidson. 

Bernadette Del Chiaro, executive director of the Solar Energy Industries Assn., tells the Los Angeles Times’s Ivan Penn that “the new tariffs probably will add about $650 to the average solar power system a homeowner would buy” — an amount that is “unlikely to stop consumers and businesses from going solar or force solar companies out of business.”

“I think in the long run, there's no turning back,” says Del Chiaro. “Consumers have already gotten a taste of what it means to have control in their world. It just has the effect of potentially slowing us down.”

But that’s the long run.

“The tariffs the president announced start at 30% next year and ultimately fall to 15% by the fourth year. In each of the four years, the first 2.5 gigawatts of imported solar cells will be exempted from the tariff,” report Ana Swanson and Brad Plumer for the New York Times.

“But by raising the cost of one all-important ingredient, the tariffs could make solar power less competitive with other sources of energy, like gas and wind, resulting in the construction of fewer solar projects. On Tuesday, the Solar Energy Industries Association said that the president’s action would result in the loss of roughly 23,000 jobs in the solar industry this year, as well as the delay or cancellation of billions of dollars of investments,” they continue.

And in a story that delves into the intricacies of the announcement — short term and potential — the New York Times’s Keith Bradsher and Sui-Lee Wee write that “the solar panel case in particular has been a case study in the complexity of global trade. Suniva, one of the American solar companies that had sought the tariffs, filed for bankruptcy protection last year, citing the effects of Chinese imports. But the majority owner of Suniva is itself Chinese, and the company’s American bankruptcy trustee supported the trade litigation over the objections of the Chinese owners.”

And the other company that filed a complaint under Section 201 of the Trade Act of 1974, SolarWorld Americas, is a subsidiary of German company SolarWorld AG, reports Tracy Lee for Newsweek.

The administration also announced a tariff on large residential washing machines  — a 20% tariff on the first 1.2 million imported the first year and 50% on additional machines. Samsung and LG both protested, reports CNBC’s Domm. “Goldman Sachs analysts forecast that the cost per machine could rise by anywhere from 8% to 20% for consumers in the first year,” she writes.

Bottom line: It will all come out in the wash, of course.

1 comment about "Solar Industry, Consumers Brace For Impact Of Hefty Tariffs".
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  1. Paula Lynn from Who Else Unlimited, January 24, 2018 at 11:54 a.m.

    What is the law ? Can a president add tariffs helter skelter on anything he/she wants to add tariffs to or does taxation fall under the responsibility of congress passing laws ?

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