A Fresh Take on Trump’s Solar Tariff

A Fresh Take on Trump’s Solar Tariff

“The end of the solar industry as we know it!” “20,000 jobs down the drain!” It’s safe to say the majority of the solar industry was on edge leading up to signing of the Trump Administration’s solar tariff. A couple months have passed since the infamous 30% tariff on imported solar panels was enacted and now that the dust has settled, lets take an objective look at the effects of this controversial piece of legislation.

Although it is hard to make the case that this tariff will have a positive overall impact on the US solar industry, its predicted consequences (both positive and negative) have largely been blown out of proportion. Even the tariff itself is not as extreme as many initially feared. It currently sits at 30% and will decline 5% per year before being phased out completely in 2022. When compared to the rapidly shrinking cost of solar panels, this initial 30% “hit” initiated a negligible effect on the price that customers pay for solar energy. Many don’t realize that solar panels account for a small percentage of residential installation’s cost and experts have seen only a 3-4% increase in the price homeowners are paying for their systems. In a market that has seen the average price-per-watt drop from $6.00 to $3.00 in only a few years, a 4% price increase is a minor speedbump as the cost of installed systems continues to decline.

Utility scale solar has seen greater repercussions as the price of panels constitutes a greater share of a large-scale project’s total cost. A handful of large projects have recently been cancelled or put on hold in the wake of the tariff but the fact still remains that solar energy is the least expensive energy on the planet. New tariffs on steel and aluminum, materials which are vital to pipeline and powerplant construction, have made fossil-fuel-based energy considerably less attractive when put up against renewables. As solar installation and material costs continue to drop it will become increasingly difficult to justify a fossil fuel power plant over a large field of solar panels.

We at Mobile Solar have always been firm believers in using parts that are made in the USA. Suniva’s bankruptcy left us without one of our favorite US-based suppliers and we have since turned to LG panels that are imported from South Korea. American solar panel manufacturers like Suniva simply could not compete with the price and quality of panels that have been coming out of Asian countries where labor is cheap and governments heavily subsidize manufacturers. Now as automation lessens the benefits of cheap labor and tariffs increase the cost of shipping panels overseas, several of the world’s largest solar panel manufacturers are expediting their previously drawn up plans to set up shop in the United States. However, most of these fully automated manufacturing plants are to be owned by foreign companies and produce few new jobs – creating little benefit for the United States. But one more American job is a move in the right direction.

 It is yet to be seen whether or not the benefits of the tariff outweigh its consequences. Either way, the imbalance is insignificant and the solar industry will continue to grow as it outshines its more expensive and less sustainable competition. As long as we are making progress towards a better future for our planet, well, we are making progress.

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