In January, President Trump approved major import tariffs on solar cells and modules. The executive decision elicited protests from some quarters and cheers from others. Three weeks later, projections of what impact the tariffs will have on the industry continue to vary.
On January 22, Trump imposed a 30 percent tariff on solar imports, which will incrementally decrease then disappear over a four-year period. Not surprisingly, many solar industry proponents were incredulous. They questioned the logic of the tariffs and projected huge price increases and job losses.
Among the critics was the National Electrical Contractor's Association (NECA). NECA CEO, John Grau, called the tariffs "a step backwards for one of the most promising sectors in the American economy."
He said the tariffs could put as many as 23,000 jobs at risk just in the first year.
Critics have also noted, while Trump professes to support American manufacturers, the two companies that filed a case with the U.S. International Trade Commission (ITC) are actually foreign-owned.
On the other hand, the market research firm, GreenTech Media (GTM) Research, has identified a number of points of optimism. The company notes that Annex I of Trump's proclamation includes a list of Generalized System of Preferences (GSP) beneficiary countries. These countries are exempt from import tariffs because they currently account for only a small portion of U.S. solar imports.
Imports from GSP countries are limited to 3 percent of U.S. crystalline silicon photovoltaic (CSPV) imports per country and 9 percent total for all exempt countries. Countries such as India and Turkey, which are on this list, could increase their manufacturing to provide for the U.S. market because they are currently well under the thresholds.
Also, many solar companies are hopeful that there will be a successful challenge to the tariffs at the World Trade Organization (WTO). If the WTO authorizes members to implement retaliatory measures, that could be the end of the U.S. tariffs.
GTM Research also asserted that the impact of the tariffs will be felt disproportionately among states depending on the regional penetration of the solar market and the varying policies that states have adopted by.
For example, California is projected to lose 1,079 megawatts in new solar capacity between 2018 and 2022, but this is a relatively small percentage because the Golden State has the largest solar market in the country.
At the other end of the spectrum, according to GTM, Montana’s solar market may plummet by as much as 50 percent because it has no policies to bolster the industry.
About The Author
LAEZMAN is a Los Angeles-based freelance writer who has been covering renewable power for more than 10 years. He may be reached at [email protected].