The Trump Administration’s new tariff on solar power imports is anti-growth and illogical. More seriously, it will slow the U.S. solar industry and cost 23,000 jobs.
U.S. President Donald Trump has struck again with a policy that just doesn’t make any sound economic sense and therefore is more likely to be rooted in ideology than any actual sense of what’s really going on in the world.
As reported yesterday by Renewable Energy Magazine, the 30 percent tariff will be levied on imported solar modules and cells in the first year, with the rate of the tariff being adjusted from there according to a scale. This will mean it reduces to 25 percent in the second year, 20 percent in the third year and 15 percent in the fourth year. In each year, the first 2.5 GW of imported solar cells will be exempted from the tariff.
The Trump Administration claims that the tariffs on solar power imports are necessary in order to benefit U.S. solar panel manufacturers. However, the reality is that they will actually hurt the American solar market because those imported materials are key to the country’s booming solar industry. This means that thousands of jobs are likely to be lost across solar project development and installation, and also among companies that manufacture solar components, such as the inverters that accompany the panels in a typical solar power array, as well as racking systems for larger projects. Meanwhile, American consumers and companies will have to pay more for solar technology, a sector that is growing phenomenally across the globe.
“There’s widespread opposition to solar tariffs across the political and economic spectrum,” said John Rogers, a senior energy analyst at the Union of Concerned Scientists. “This issue has united conservatives and liberals unlike anything else I’ve seen during Mr Trump’s presidency. Sadly, his decision today burdens states with greater economic costs and attempts to derail clean energy progress. President Trump says he intends to save jobs, but the specifics show this decision is a job killer. The first year of tariffs is high enough to blunt the growth of solar energy in the U.S. and hurt domestic solar jobs, but the package is not nearly enough to give U.S. solar panel manufacturers the ill-conceived walls of protectionism they were looking for. Tens of thousands of jobs in the solar sector could be stamped out, and it could hurt momentum at a time when we need to massively ramp up clean energy to reduce carbon emissions. It’s clear this administration has no interest in reducing U.S. emissions. The states are going to have to pick up the slack by strengthening regional policies.”
“The president’s decision to impose a 30 percent tariff on solar cells and modules will raise electricity prices even as it costs jobs in the solar energy sector” added Gregory Wetstone, the president and CEO of the American Council on Renewable Energy (ACORE). Make no mistake; this is the government intervening in the marketplace to reduce the expansion of solar energy.”
ACORE expects the American solar sector to remain vibrant, but the tariff will be an unnecessary drag on an important source of domestic investment and job creation.
This, in turn, means that rather than, now, enabling American solar to become cost competitive with fossil fuels, the likely effect will be to reduce U.S. solar installations by 10-15 percent over the next five years, according to MJ Shiao, head of renewable energy research for Wood Mackenzie. According to FT, shares in U.S. solar developer and manufacturer SunPower have fallen by 1.4 percent and its CEO predicts that the company will be hit by ‘collateral damage’ from the tariff, impacting SunPower more than any U.S. solar developer.
The Solar Energy Industries Association (SEIA) predicts that the tariff will eliminate 23,000 jobs from the U.S. solar sector, about 9 percent of the total U.S. solar workforce.
“While tariffs, in this case, will not create adequate cell or module manufacturing to meet U.S. demand or keep foreign-owned Suniva and SolarWorld afloat, they will create a crisis in a part of our economy that has been thriving, which will ultimately cost tens of thousands of hard-working, blue-collar Americans their jobs” said Abigail Ross Hopper, SEIA’s President and CEO.
Tony Clifford, chief development officer, Standard Solar added:
“It boggles my mind that this president - any president, really - would voluntarily choose to damage one of the fastest-growing segments of our economy. This decision is misguided and denies the reality that bankrupt foreign companies will be the beneficiaries of an American taxpayer bailout.”
Costa Nicolaou, president and CEO of PanelClaw, an American racking company, added that what’s most disappointing is that the president sided with two foreign-owned companies and didn’t listen to Americans from across the country and political spectrum who understood tariffs will cause great economic pain for so many families in the solar sector.
Fortunately, there are two bits of good news. First, the tariff is nowhere near as bad as that requested by Suniva and SolarWorld. Secondly, the American solar industry will survive, simply because, according to Abigail Ross Hopper, the case for solar energy is just too strong to be held down for long.
As with wind power, and his hopes to revive the American coal industry, Trump doesn’t seem to realise that it’s too late. The stable door is open, and the horse has long since bolted. The future is renewable, and that means American coal is as good as dead already.🔷