President Trump announced a 30 percent tariff on imported solar panels yesterday, an “America First” move meant to curb price-dumping and illegal trade practices by Chinese manufacturers.
Many U.S. solar companies, environmentalists, and others see different priorities in play, saying the trade move favors fossil fuels and, by raising the cost of installation, will damage both the domestic solar industry and renewable power adoption. Some opponents predict more than one-third of the industry’s 260,000 jobs will be at risk due to this protective action, and the Solar Energy Industries Association said the decision will delay or cancel billions in solar development and investment.
As a solar company, we are devastated to learn Trump has imposed a 30% tariff on solar panels virtually killing the solar industry. Solar employs more people than coal and oil combined. today's decision will cause the loss of roughly 23,000 American jobs this year.— Eugene Wilkie (@NOW1SOLAR) January 22, 2018
The government issued the ruling on the behest of U.S.-based (but foreign-owned) companies Suniva and SolarWorld, according to the Washington Post, who complained that cheap Chinese panels, backed by state subsidies, allow them to sell at a price they can’t match. This decision is the latest move in a decade’s worth of debate over China’s subsidizing of its domestic solar industry.
The order itself cited the incredible growth in solar installation in the U.S. in the last few years, noting that “from 2012 to 2016, the volume of solar generation capacity installed annually in the United States more than tripled.” That’s growth in the U.S. solar market that, before this trade decision, was expected to accelerate and nearly triple in size in the next five years.
While the price of solar continues to drop—at a speed some analysts believe will make Trump’s action just a speed bump in the move towards green power—any slowdown in solar installation can have grave impact in reducing carbon emissions. Many industry observers now say the new tariff, which starts at 30 percent and will decrease over the course of four years to 15 percent, will make many current installations prohibitively expensive.
But analysts also say, in addition to crippling the sale and installation of solar in the United States, the move has little chance of actually bolstering U.S. manufacturing, which is just 5 percent of global production, and a fraction of the total solar workforce in the U.S.
According to an Axios analysis, the order will lead to minimal investment in U.S. solar factories, net loss of jobs in the booming solar installation industry (potentially a loss of 10 percent) and potent trade retaliation from China. Others note that, with Chinese tariffs likely to stay in place after this action, U.S. companies will still be barred from the world’s fastest-growing solar market, which will continue to be a costly lost opportunity.
Politically, there’s strong opposition to solar tariffs, especially from mayors and local leaders pushing for renewable power and supporting local green energy investment. More than 90 percent of the members of Congress who weighed in on the solar tariffs case opposed them, including 44 Republicans and 49 Democrats. South Carolina’s Republican Governor Henry McMaster testified that these tariffs would cost American jobs.
Many in the solar industry, as well as clean-energy advocates, say there’s still a chance to make a last-minute appeal to Congress to avert the ruling’s impact, and writer, climate expert, and industry analyst Varun Sivaram believes the World Trade Organization may rule the tariffs are illegal.