C&I, DER, Rooftop, Solar, Utility Integration

Trump’s Solar Tariffs Will Have a Minimal Effect on Residential Solar Panel Costs In 2018

Last week, the office of the U.S. Trade Representative (ITC) announced that President Donald J. Trump had imposed additional duties on solar panels and solar cells.

The additional tariffs are 30 percent on imported solar panels and cells, declining by 5 percent per year over four years, with an exemption for the first 2.5 gigawatts of imports.

These tariffs are the result of the Section 201 trade petition by Suniva and SolarWorld, (two global solar module manufacturers with production in the United States) that petitioned the ITC for relief against what it said was unfair competition from overseas imports.

The rationale for imposing tariffs is complete bunk. Most, if not all, of government support for the solar industry in China has now been withdrawn. President Trump is pretending to protect U.S. manufacturing jobs, though in reality the decision will cost nearly 23,0000 U.S. jobs in the downstream segments of the industry, according to estimates by the Solar Energy Industries Association (SEIA).

According to SolarReviews research, the increased retail cost of a residential solar install would be approximately 4.9 percent (the cost of Tier One Chinese modules, selling for $0.50 per watt in 2017, then all things being equal the 30 percent tariff would add 15 cents per watt added to the wholesale cost of panels themselves.)

Additionally, SolarReviews believes the immediate impact over the early months of 2018 from the 30 percent import duty will be reduced by the fact that many Chinese solar companies moved large volumes of stock into the U.S. prior to the announcement of this tariff. In some cases, they moved enough stock to meet almost six months of demand.

There will undoubtedly be rises in the wholesale price of modules, but we don’t expect the new tariffs to lead to any meaningful increase in the cost of residential solar energy systems over 2018. Rather, the new tariffs will take away cost reductions that would have happened without the tariffs as they absorb the efficiency improvements that will happen across the solar supply chain during 2018 and 2019.

A detailed breakdown of the SolarReviews’ analysis can be found here.