Environmentalists and the renewable energy sector are far from happy about the recent announcement from the White House that the U.S. would now put a 30% tariff on imported solar panels. While the move by Trump is intended to bolster American manufacturing and show China — which currently supplies some 80% of the equipment used in U.S. solar projects — that we can play tough, it actually further undercuts an already hampered domestic renewable energy sector by raising costs significantly for everyone involved. Solar market research firm Wood Mackenzie predicts that the new solar tariffs will drive the price of solar power up across the board in the U.S. by up to $0.15/watt, or about 15% overall for the end consumer.
The Solar Energy Industries Association, a trade group representing American solar manufacturers, installers and sellers, projects the move will result in the loss of some 23,000 jobs in a sector that currently employs 260,000 American workers and will also result in the delay or cancellation of billions of dollars in solar investments.
While the solar tariffs will start out at 30%, they will drop down in steps over four years to 15%, with the first 2.5 gigawatts of imported solar panels exempt each year. Two foreign-owned solar manufacturers with bankrupt U.S. operations, Suniva and SolarWorld, have been lobbying the White House and lawmakers hard to institute the tariffs to help level the playing field economically for American-made solar equipment. (Back in October, the U.S. International Trade Commission recommended taxing solar imports at an even higher rate of 35% to help American solar manufacturing.)
“While tariffs in this case will not create adequate cell or module manufacturing to meet U.S. demand, or keep foreign-owned Suniva and SolarWorld afloat, they will create a crisis in a part of our economy that has been thriving, which will ultimately cost tens of thousands of hard-working, blue-collar Americans their jobs,” says SEIA president Abigail Ross Hopper.
Environmentalists and clean energy advocates are keeping their fingers crossed that the World Trade Commission will be an unlikely hero in this case by blocking the solar tariff as a violation of international law. “The provision under which Trump took action has been used rarely, and its tariffs are almost always struck down by the WTO.” reports Timothy Cama of TheHill.com. “The last time it was used was in 2001 for steel imports, and the WTO overturned the penalties.”