On Monday, Jan. 22, the Trump Administration issued a trade ruling on imported solar panels. Based on recommendations from the U.S. International Trade Commission (ITC), the ruling sets a 30% tariff on imported solar cells and modules in the first year of implementation, declining to 15% by the fourth year. The tariff also allows 2.5 gigawatts of unassembled solar cells to be imported tariff-free each year.
Beyond the rhetoric, this new policy is seen as a helping hand for some solar manufacturers in the U.S. but negative for solar installers and utilities across the country. The ITC made the tariff recommendation last year after solar manufacturers lobbied the commission that China had been subsidizing its solar manufacturers unfairly since 2005, allowing it to undercut U.S. manufacturers.
Several business and finance analysts have noted that the tariff raises costs for residential and utility-scale solar, anywhere from 3% to 10%. With up to 374,000 workers currently employed in the U.S. solar industry, and only 38,000 of those being in manufacturing, solar installers will be hardest hit.
Foreign companies impacted by the tariffs plan to file a formal complaint to the World Trade Organization (WTO) claiming the policy violates international trade rules. The WTO has the authority to take action and reject these tariffs but it will take months for the formal complaint process to be complete.
Quick Economic Stats:
- Tariff will likely reduce solar installation growth by 10-15% over the next five years.
- The tariffs will decline in 5% increments over a four-year span, ending at 15% by 2022.
- A 30% tariff equals to be about $0.05-$0.10/watt depending on the market segment.
- Residential and utility scale solar prices could rise between 3-10%.
Additional Resources:
- Reuters: Trump slaps steep U.S. tariffs on imported washers, solar panels
- Vox: Trump’s new solar tariff to protect US manufacturers will hurt installers
- Axios: Trump’s solar penalties are lighter than the industry feared
- Bloomberg: Five Solar Firms That Actually Stand to Gain From Trump’s Tariff
- Utility Dive: Trump issues 30% tariff on solar panel imports
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