Anyone who wants more solar power in the United States will agree that anything that raises the price of solar installations is bad. If solar is more expensive, fewer people will buy it. And that means less solar for America.
So in general, adding a tariff of up to 30% on solar panels imported into the U.S. from China and other countries is bad. That’s what the Trump administration did in January in response to a complaint by two embattled U.S.-based solar panel makers, Suniva and Solar World.
Since the vast majority of solar panels installed in the U.S. are imported — 40% come from China alone — tariffs on imports will mean higher prices for solar installations. And that could slow down the spread of solar power across America.
The bigger question here, for solar patriots who want to unite all Americans behind going solar, is who is to blame. Many in the media have claimed that the tariffs are an issue of Trump vs. solar, or Republicans vs. clean energy. If true, then progressives can certainly rev up their partisan engines, with solar tariffs just one more reason to blame the other side.
And many did. For example, long-time climate activist Bill McKibben tweeted “Trump imposes 30% tariff on imported solar panels–one more effort to try and slow renewable energy, one more favor for the status quo.”
(To be fair, some Republicans and conservatives also criticized the tariff. For example, Fox News host Sean Hannity said tariffs would just be a “bailout” of for the two companies that brought the original complaint that Chinese companies were dumping panels in the U.S. at below-market prices back in June of last year.)
But what if the reality is less dramatic than the partisan campaigners would suggest? What if the tariffs aren’t especially Trumpian or Republican but are just a predictable response of the federal government to a request from American-based companies for help?
Obama Put Tariffs on Imported Solar Panels Too
As Popular Science explains, Trump wasn’t the first president to slap tariffs on Chinese solar panels:
In 2012, then-President Barack Obama created his own tariffs on solar panel imports. Those “anti-dumping tariffs” were instituted because the administration believed China was selling solar panels that had been heavily subsidized and then sold significantly below fair market value. Much to the excitement of SolarWorld Industries America, Obama’s policy placed tariffs of 31 percent and up.
Everybody knows that Obama’s attitude to solar and clean energy was the opposite of Trump’s. While Trump has denigrated solar and wind and boosted fossil fuels with a campaign to “bring back coal” and allow drilling off the coasts for oil, Obama was a big advocate for solar and renewables. Yet, they both slapped duties on imported solar panels.
So, while there might be a slight Trumpian or partisan flavor to the latest solar tariff — as critics note, the tariff case did give Trump a chance to sound tough on China and claim to be protecting American jobs — the tariff itself was not an especially partisan move.
Obama put tariffs on Chinese solar panels too, and his rate was slightly higher than Trump’s. That’s just what presidents too. When domestic companies ask for help competing with imports, sometimes the federal government will try to help.
So, this is not an issue of Trump vs. solar. Or Republicans vs. solar.
It’s really just business as usual in today’s world economy, where national governments may try to protect domestic industries, whether it works or not. Too bad Obama’s tariff didn’t help U.S. panel makers much in 2012. And too bad Trump’s tariff won’t likely help SolarWorld and Suniva much today either.
Not that Americans should care much, because one of the companies, Suniva, is actually majority Chinese-owned. And SolarWorld is the subsidiary of a German company.
This tariff stuff’s complicated, to say the least.
More important is the politics. Knowing the details, I hope that solar advocates will resist the temptation to make a political fuss over this tariff. Progressives and conservatives should still work together to spread solar, and not get caught up in partisan finger-pointing.
A Bigger Threat To Solar than Tariffs
Solar panel tariffs, whether by Trump or Obama, are not part of a grand plot to kill clean energy. And this tariff probably won’t even have much effect on the industry. Most experts agree that the new tariffs, filled with exceptions and limitations, will raise the price of an average home solar installation only a small amount. As Anya Schoolman, one of the experts in The Solar Patriot, wrote in an email message to supporters of her organization, Solar United Neighbors:
Solar panels are only one part of the cost of going solar. Other costs include system components besides the panels, such as racking and inverters, and non-equipment costs such as labor and permits. The tariff will not raise these costs. We estimate the 30% tariff will add about 10-15 cents per watt, or about 6% of a system’s total cost. The increased cost of panels adds about $1,050 to the total system cost. Minus the 30% federal tax credit, and that additional cost lowers to $735.
And after a few months, once the industry has time to adjust, the effect of the tariffs might be hardly noticeable.
There are much bigger threats to making solar America’s #1 energy source than these minimal tariffs, which are due to decline in value over the next three years and then completely expire.
People who support solar power should not be distracted. The real threat remains monopoly utilities who want to slow down solar in their states and fossil fuel companies who want to keep the prices on dirty energy artificially low so that they can continue to compete on price with solar.
So, forget about the tariff. It’s time to move on to opening up power markets across the U.S. and then putting a price on carbon so that dirty energy will have to pay for the right to pollute. Making fossil fuels pay their full fare will raise the price of dirty energy and make solar relatively more affordable.
And that will dwarf any price increases on solar from Trump’s tariffs.
— Erik Curren, The Solar Patriot