Trump Creates a New Barrier to Solar Power

installation, solar panels
Installing photovoltaic panels on the roof at a research support facility. Photo credit: U.S. Department of Energy / Flickr
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President Donald Trump made good on his “America First” promise last Monday by slapping a hefty 30 percent tariff on imported solar panels. Combined with a duty on imported washing machines, the move is the first of what could be many protectionist shifts in America’s global trade policies.

But while the purported benefit to domestic manufacturing is dubious, a tax on solar panels can in fact precipitate US layoffs — and a nasty trade war with China.

Solar energy is one of the fastest-growing sectors in the US and currently employs more than half a million Americans. Low import and production costs have made it a $29 billion industry. Nonetheless, the International Trade Commission still recommended a 35 percent duty on imports during a hearing last October. The tariff, far from expanding the labor force, could eliminate 23,000 manufacturing jobs by depressing demand for solar products. The Solar Energy Industries Association warned of a loss of billions in investment dollars.

Domestic solar developers reject the administration’s claim that bargain imports are hurting them, and given that solar manufacturing has never been a particularly lucrative operation in the US, the tariff appears futile. Foreign companies build cells and modules at a much lower cost, attracting American installation firms with the prospect of greater profits. Imports comprise 80 percent of solar panels in the country. In anticipation of soaring production costs, businesses have been hoarding foreign panels since last fall.

At the moment, it seems like only a handful of firms stand to benefit from the president’s decision. One happens to be a bankrupt solar panel producer that influenced his decision. Suniva Inc., asserting that it had suffered “serious injury” from cheap Asian panels, urged the Trump administration to impose duties of 32 cents per watt for imports. The new tariff, though lower than what the firm demanded, can lift its value and sales.

There is, however, a sliver of hope for the country at large. With the tariff windfall — roughly $1 billion a year — the government could build cost-effective domestic plants, each an ecosystem that would spur new jobs and support renewable energy. Unfortunately, that’s not a road the president is likely to take.

In the videos below, physicist Richard Komp examines how solar panels operate, and Bloomberg reporter Chris Martin argues why the sun may soon overtake coal as America’s primary energy source.

See also these related WhoWhatWhy articles on China’s big investment in green energy, Kentucky coal country’s solar switch, and a solar energy experiment in Iowa.

Related front page panorama photo credit: Adapted by WhoWhatWhy from Solar Panels (RecondOil / Flickr – CC BY 2.0).

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5 responses to “Trump Creates a New Barrier to Solar Power”

  1. chelmite says:

    Click on the SEIA’s description of why 90% of the American solar industry is hurt by the tariffs. Solar systems involve a lot more than just the panels. Slapping tariffs on foreign panels means reciprocation on American products, which are part of the non-panel 90% of the system.

  2. I got a great idea. There is yet no SEA (Solar Enforcement Administration. Let’ start smuggling in solar panels like we do heroin and cocaine. Nobody is likely to die from too much solar energy.

  3. Paulus says:

    No Mush! President Trump,is not so dumb as YOU would want us to believe. Yes, we will,use solar power – but that will be American produced solar power and the industry will be located in Detroit – we have the know-how, we have the Labour and by Jove we have the finance. ANYTHING China can do (since they stole the know-how on the processes from the USA in the first place!) America can do better. Even if in the short term the costs are greater – in the long run American industry will gain from local manufacturing. Secondly it is surely about time the USA started hacking into Chinese technology and robbing THEM for a change……….then see them squirm.

    • Root Hog or Die says:

      You’re correct, anything China can do America can do better– like charge HIGH prices. We the People gain nothing from these tariffs other than higher prices. Most people can’t get a system to pay for itself in savings so the more prices come down, the more people will jump on board. It’s pretty basic economics.