Trump’s solar decision and what it means for the solar industry
(Green Street, SunPower, and SEIA marching in Washington, D.C.)
On Monday, the solar industry received big–and unfortunate–news from President Trump regarding the Section 201 trade case. Against the protests of the majority of the solar industry, and despite the major job loss and project cancellation predictions, the Trump Administration has announced a 30% tariff on imported solar panels, set to reduce 5% each year during the tariff’s four-year timespan. A very tough blow to solar companies in the U.S.
|Year 1||Year 2||Year 3||Year 4|
|Safeguard Tariff on Modules and cells||30%||25%||20%||15%|
|Cells Exempt from Tariff||2.5 gigawatts||2.5 gigawatts||2.5 gigawatts||2.5 gigawatts|
Most solar companies have feared this possibility for months, and for good reason. While this tariff is far more moderate than Suniva and SolarWorld’s initial proposal, SEIA still projects that it will cost the U.S. solar industry 23,000 jobs1 this year alone. Not to mention that many solar projects already in the works may no longer pencil, forcing companies to abandon them. Developers of large, utility-scale projects where panels make up roughly one third of project costs, will get hit the hardest. With many of the biggest projects no longer economical, U.S. solar deployment could plummet by over 7 gigawatts2—more than 30 million panels3.
This tariff decision doesn’t exactly come as a surprise though. Trump has made his favorable stance toward protectionist trade policies very clear since the beginning of his campaign, this was just his first opportunity to follow through on his promises—his political agenda all but precluded any veto of this tariff from the start, much to the chagrin of many conservative allies.4
WHAT HAPPENS NEXT
The tariff will begin to take effect this year, once the U.S. has imported 2.5 GW of solar cells since the start of 2018. Each year, the first 2.5 GW of imported cells will be exempt from the tariff. According to GreenTech Media, the tariff is projected to increase solar module costs by 10 to 12 cents per watt. Consequently, that increase in price is likely to cause an 8.3% dip in the solar market. With the rippling effects of this tariff, the immediate future does not look too bright for solar.
There is, however, at least one way that opposition can protest this decision—by approaching the World Trade Organization (WTO). In fact, China and South Korea have already expressed great disappointment; “it is clear that the latest safeguard measures would violate the WTO rules” (reuters, Asia protests at U.S. solar, washer tariffs, fears more to come). These countries plan to approach the WTO very soon.
In the meantime, if you’re looking to stand up for solar jobs, the best thing you can do is help to spread awareness of this tariff’s negative potential. You can also support the Solar Energy Industries Association (SEIA), an organization focused on solar advocacy and education (they made herculean efforts to protest this tariff).
Most importantly, you can continue to support the solar industry as a whole by bringing solar power to your home or business. Together, we can keep renewable energy growing in the U.S.