Will Trump’s Tariffs Affect Solar Potential?

The solar energy industry could potentially take a hit in the coming months due to a projected decision on solar energy tariffs for supplies imported from foreign countries. Four commissioners from the International Trade Commission (ITC) introduced three separate ideas to the President who has until January to make a decision on which policy, if any, he will implement. Most sources agree that additional tariffs on solar imports could be disastrous to the U.S. market as it stands currently. This week, we’re going to dive into the basics: what did the commissioners propose, what does our current solar market look like, and how could new tariffs potentially affect the future of solar sales?

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What Solar Tariffs are being Proposed?

Suggestions from the commissioners at the ITC showed a wide range from less aggressive models that would taper off in the coming years to highly aggressive tariffs which could impact manufacturer’s willingness to import to the U.S. Which of the three propositions is most likely to be chosen is still unclear, but according to most sources, the White House will likely choose a plan on the higher end of the spectrum. In a 2017 article from Green Tech Media titled The Potential Impact of Solar Tariffs in 12 Charts, “these recommendations will… be delivered to President Trump, who holds protectionist economic views and reportedly requested that someone in the Oval Office ‘bring [him] some tariffs.’” Basically, the White House wants to make tariffs as high as possible for imported solar cells and modules so that the funds can be used to help develop domestic providers in the future. However, those protectionist views could have severe consequences for the immediate future of the solar industry.

What is the Solar Market Like Now, Without Tariffs?

As it stands now, without tariffs, the solar industry in the U.S. has actually been on a steady incline. New jobs have opened in the solar industry at a climbing rate and as prices for equipment have declined, more new businesses have been able to tap into a market they were unable to utilize previously. According to Trump administration is about to make solar power too expensive for Americans, a 2017 article from The Hill, prices for residential solar equipment have dropped a staggering 70%. This has made residential solar access possible for many American families which previously would not have been able to afford it. Since tariff talks began, however, the stock market has been influx as investors are hesitant to put money into a potentially be a failing endeavor. Currently, the U.S. does not have enough domestic solar cell and module manufacturers to meet the projected needs of the industry without foreign aid. An article titled Will The U.S. Solar Industry Survive Import Tariffs? Trump Holds The Cards which Forbes.com published in October this year also notes that over 260,000 American citizens currently work in the solar industry and half of those are either installation or sales positions which do not require a degree to obtain. Job growth is one of the most promising aspects of the solar industry, and high tariffs could mean closing doors on potential jobs if the market crashes.

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How Could Solar Tariffs Potentially Affect the U.S. Solar Market?

If aggressive tariffs are passed on foreign manufacturers, it could stunt the growth of the solar industry in the States. Foreign manufacturers that once helped grow the industry will likely sell to larger markets like China and India without the hassle of tariffs, leaving the American solar market to fend for itself. Abigail Ross Hopper of the Solar Energy Industries Association was quoted in the previously mentioned Forbes article, stating “ Sunvia’s remedy proposal will double the price of solar, destroy two-thirds of demand, erode billions of dollars in investment and unnecessarily force 88,000 Americans to lose their jobs in 2018.” Harsh words from a solar expert, but the loss of American jobs in a rapidly growing global industry is never a projection that is good for the country. The aforementioned Greentech Media article identifies the area of the solar industry most likely to be impacted as the utility-scale solar sector because it is so sensitive to price fluctuations. The residential sector, it states, is the most resistant to fluctuations which may occur after implementing harsh tariffs.

What are your thoughts on potential tariffs in the solar industry? Let us know in the comments what you think and share this article with a friend who’s invested in the future of solar power!