A 30 percent tariff usually seems like a tough pill to swallow for any industry, but fortunately, this hasn’t been the case for solar power.
On January 22nd 2018, President Trump announced a 30 percent tariff on global imports of silicon cells and modules into the United States. The resulting tariff was actually not as harsh as predicted, since Suniva – a Chinese owned, U.S. based manufacturer of solar cells and modules – actually called for a 100 percent tariff.
However, the tariff will decrease 5 percent each year through 2021, and will cease to exist by 2022. The first 2.5 GW of cells imported each year will be excluded from the tariff to alleviate the initial blow. Film photovoltaic technology is also exempt from the tariff. This technology accounts for a quarter to a third of the U.S. market, playing an integral role in manufacturing, per Renewable Energy World.
When the tariff was first enacted, utility developers paused their solar projects. U.S. companies that had large solar-panel installation projects in the pipeline, then cancelled or froze those projects due to the tariffs. According to CNBC, as of June 2018, “A tariff on imported solar panels has led U.S. companies to cancel or freeze investments of more than $2.5 billion in large installation projects, along with thousands of jobs.”
Residents like us, have already felt and will continue to feel some residual effects from the imposed 30 percent tariff. But you’ll be surprised to hear that it’s not as bad as anticipated.
How advances in solar manufacturing ease the blow from the percentage-based tariff.
Advances in technology and development have helped reduce the cost of solar panels year over year. In fact, solar prices have steadily declined between 2 to 6 percent over the last four years.
Power your home with community solarCheck availability
The tariff really found its beginnings in 2017, when the U.S. International Trade Commission voted 4-0 in favor of implementation.
Remember earlier when we mentioned the Chinese company Suniva, who was in favor of a 100 percent tariff? Well, unsurprisingly they were also in favor of the ruling by the ITC. According to Utility Dive, “The U.S. International Trade Commission voted 4-0 on Friday to find that imports of cheap solar panels have caused injury to domestic solar manufacturers, setting up a high-stakes tariff decision for President Trump.”
That high-stakes decision led to the 30 percent tariff. We mention this ruling, because it directly correlates with the price spike of 2017. Until then, solar prices continued to s decline at a monthly rate of 0.7 percent, per Energy Sage. After the 2017 ruling, that monthly rate dropped to 0.5 percent.
Once the tariff came into effect, consumers saw quoted prices that were roughly 5 percent higher than expected pre tariff prices. Overall the average consumer has seen their price increase $0.16 cents per watt.
If the 30 percent tariff was stopping you from committing to renewable energy – you can stop worrying. Solar development continues at a rapid pace.
Don’t take our word for it. According to the U.S. Bureau of Labor Statistics, solar photovoltaic installers are the fastest growing job in the United States, followed by wind turbine service technicians.
Renewable energy is an expanding market which you should already take advantage of, because the 30 percent tariff is nothing more than a minor bump in the road.