Published on January 23rd, 2018 | by Tina Casey0
With New Solar Tariff, Trump Gets The Last Laugh On Renewables — Or Not
January 23rd, 2018 by Tina Casey
Well, it looks like for once US President* Donald J. Trump has actually followed through on a promise. During his successful campaign for the Oval Office in 2016 Trump vowed to get tough on China — you know, the place where all the cheap solar panels are made — and sure enough just last night he approved a new solar tariff of up to 30%, covering all photovoltaic cells and modules shipped to the US from overseas.
Our friends over at Bloomberg are already calling this “The Biggest Blow To Renewables Yet,” but since everything is relative, let’s take a closer look and see where the blow is really going to fall.
Trump Orders Up A 30% Solar Panel Tariff…
Solar panels were not the only target of the President’s wrath. As summed up capably by Bloomberg reporters Brian Eckhouse, Ari Natter, and Chris Martin, washing machines also came in for their share of the pain.
On January 22, 2018, U.S. Trade Representative Robert Lighthizer announced that President Trump has approved recommendations to provide relief to U.S. manufacturers and impose safeguard tariffs on imported residential washing machines and solar cells and modules, based on the investigations, findings, and recommendations of the independent, bipartisan U.S.International Trade Commission (ITC).
Skipping over that part about washing machines, let’s cut to the solar tariff mustard. According to ITC, there’s this problem:
From 2012 to 2016, imports grew by approximately 500 percent, and prices dropped precipitously. Prices for solar cells and modules fell by 60 percent, to a point where most U.S. producers ceased domestic production, moved their facilities to other countries, or declared bankruptcy.
And, this problem:
By 2017, the U.S. solar industry had almost disappeared, with 25 companies closing since 2012. Only two producers of both solar cells and modules, and eight firms that produced modules using imported cells, remained viable…
The 30% solar tariffs would only apply for the first year and dip down to 15% by the fourth year, which presumably gives domestic manufactures enough time to hone their competitive edge — at least, that’s the idea.
… Cue The Outrage!
The crushing news about the 30% solar panel tariff pretty much drowned out the yelps from washing machine stakeholders.
Here’s a sampling from my inbox:
Union of Concerned Scientists: “President Trump’s Tariffs Put US Jobs, Solar Industry at Risk”
American Council on Renewable Energy: “”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. Make no mistake, this is the government intervening in the marketplace to reduce the expansion of solar energy.”
Vote Solar/Get Some Sun: “There are a lot of ways to further support the growth of U.S. renewable energy manufacturing; this job-killing tariff is not one of them. Instead, this misguided decision to impose tariffs on solar products will negatively impact thousands of workers who depend on solar to support their families, and it will hurt American competitiveness in the global economy.”
GRID Alternatives: “The Trump Administration’s decision to impose tariffs and quotas on solar panels is a setback for clean energy and jobs in frontline communities.”
Environmental Defense Fund: ““Trump’s decision is out of line with the needs of the American workforce and the clean energy economy, which is transitioning to renewables at an unprecedented pace.”
Natural Resources Defense Council: “Trump’s Solar Tariffs Will Kill Jobs, Increase Carbon Emissions & Drive Up Consumer Costs.”
Of course the big kahuna, the Solar Energy Industries Association, also weighed in:
The decision effectively will cause the loss of roughly 23,000 American jobs this year, including many in manufacturing, and it will result in the delay or cancellation of billions of dollars in solar investments.
“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.
The Solar Tariff Blow: Timberrrrrrr!
The solar tariff blow is falling, but it’s not yet evident that it will thwart the US renewable energy juggernaut.
For one thing, US solar companies have reportedly been stockpiling solar panels in advance of Trump’s decision. The rush to buy has already caused prices to slide upward, but the immediate effect of the solar tariff will be cushioned in the near term, until those stockpiles begin to run low.
If and when the supplies begin to thin, the potential damage to the solar industry is clear.
What’s not so clear is the damage to the overall health of the US renewable energy sector.
While conventional PV manufacturing in the US may never recover, US thin film solar manufacturers could find a silver lining in the solar tariff cloud (thin film manufacturing is based on low cost, spray-on, or roll-to-roll processes).
The new solar tariff could also accelerate activity in the US wind energy sector, which is already chugging along nicely — ironically, with a hefty assist from overseas companies like Statoil and Vestas, as well as a lot of pom-pom waving from Trump’s Energy Secretary and known wind energy fan Rick Perry.
Regionally, more hydropower resources are coming on line, one major highlight being a new transmission line from Canada to New England.
In other words, Trump’s new solar tariff is a case of renewable energy whack-a-mole. The President’s action potentially lands a killer blow on thousands of existing solar energy jobs and will set off a world of pain for thousands of US workers.
As for striking a blow at the heart of renewable energy, that’s another story altogether.
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