Not long ago, the Trump administration confirmed that it would impose a tariff program on all imported solar modules and cells (not just on those products that are coming from China). The tariff program will last four years, at least. The #tariffs on solar modules and cells are imposed as a means to provide a boost to US manufacturers. In other words, the tariffs are aimed at combating unfair trading practices. Suniva and SolarWorld have petitioned the ITC (short for International Trade Commission) to impose these tariffs because the imports have been damaging their sales and profits from solar products.
Even though the tariffs have not yet been published in the Federal Register, it is just a matter of time before they will be. Below, you can find all the information that is available at the moment. The tariffs are expected to impact the US solar market.
What Are the Solar Tariffs Exactly?
The tariffs started to be imposed on February 7, 2018. They are here to stay for four years and have a value of 30% in the first year. The tariffs decrease by 5% each subsequent year. This translates to a tariff of $0.10/watt in 2018, decreasing to a tariff of $0.04 per watt in the fourth year, according to Green Tech Media. However, the solar tariffs are not as harsh as some expected. Suniva and SolarWorld have petitioned the ITC for a 50% tariff. But how much damage will the new tariffs actually do?
According to the National Solar Jobs Census in 2016, there were around 260,000 employees in the solar industry in 2016. The solar industry was responsible for 1 out of every 50 jobs that appeared in the United States. Installation accounted for most of the jobs (137,000), while manufacturing was responsible for just 38,000. According to SEIA (the Solar Energy Industries Association), the new solar tariffs will be responsible for the loss of roughly 23,000 jobs in the industry. The installation sector will see the most jobs lost. However, job growth will continue, just at a slower speed than before. In other words, even with the tariffs in place, new jobs in the solar industry will continue to appear.
There is also an expected reduction in new solar projects over the next four or five years – 7.6 gigawatts to be more precise. And of these gigawatts, approximately 65% are expected to be from utility-scale companies. However, most of the installers were given notice way ahead of the imposition of the tariffs. They had plenty of time to make stocks of solar cells and modules for at least 2018. This means that the new solar tariffs will have little impact in 2018.
According to the president of RBI Solar, Bill Vietas,”there’s no doubt this decision will hurt U.S. manufacturing, not help it.” However, let’s not forget that the solar tariffs are smaller than what was expected when Suniva and SolarWorld petitioned the ITC. Also, the tariffs have an exemption. The first 2.5 GW worth of solar modules and cells are exempt. This exemption should help US manufacturing companies mitigate a full year of the impact of the tariffs.
When it comes to prices, estimates are that they will remain at the 2017 level for the next one or two years. Basically, we should not see a price increase of solar energy and products. However, the prices will not go down either, as they did every year before the tariffs. To put it simply, the impact of the new tariffs is not as harsh as we had expected. The state incentive rates will start to decrease starting in the middle of 2018. This means that people and companies considering solar installations should start to plan as soon as possible, before the tariffs start to affect the industry in any way.
Although the solar industry has no way to control the US trade policy, people and companies have the power to change policies and regulations at the state level. Even though the tariffs will have a negative impact on the solar industry, people can advocate for policies that are solar-friendly at the local level; policies which would mitigate at least some of the damage done by the tariffs. One of the acts that are aimed at supporting the solar industry is the Solar Fairness Act, which supporters can submit to their legislators.
Bottom line, even though the tariffs are not something the industry and the people who plan to use solar installations want, they are here to stay for the next four years. There is no changing that now. Thankfully, their impact is nowhere near as damaging as was expected. Continue to read solar news updates to discover the latest information available.