Last Monday, President Trump announced that he would be imposing a 30% tariff on solar cells and panels imported from other countries. The move is aimed at protecting US manufacturers and encouraging growth in American production of solar panels, a move that has been widely lobbied for by the US divisions of foreign solar companies Suniva and SolarWorld. These two companies, which have struggled to compete with low prices offered by foreign producers, want to give American manufacturers a fighting chance in the field of solar energy. Opponents of the tariff, however, have accused Trump of trying to protect the coal and fossil fuel industries instead of nurturing the possibilities of renewable energy.
As Trump signed the order, he said, “You’re going to have people getting jobs again and we’re going to make our own product again. It’s been a long time.”
But despite these hopes, the steep tariff actually carries with it a much more likely – and more devastating – outcome: slowing the growth of renewable energy in the US, and actually depriving more than 20,000 Americans of their solar industry jobs in this year alone.
The US Solar Industry
The tariff comes at a controversial time: the solar industry is taking hold in America, with more and more consumers installing solar panels at their homes and businesses. In the past seven years, the price of solar panel installation has decreased by approximately 70%, making solar energy attainable for thousands across the country. This industry, which grew last year at 17 times the rate of the whole of the US economy, is thought by some to be the fastest growing job sector in America, and will take a major hit if their service is not financially accessible for the masses.
Besides Suniva and SolarWorld, there are very few US manufacturing jobs that are actually involved in the creation of solar panels. Most manufacturing jobs in the solar industry involve making parts – like mounts – for solar cells which are imported from other countries. Only about 2,000 jobs currently involve making cells and panels. Increasing this number and bringing manufacturing jobs back to the US is a nice dream, but the fact is that no American manufacturer will be able to compete with the cheaper prices offered by foreign producers, as bankrupt solar company Suniva knows very well.
Effects of the Tariff
Most solar energy jobs are in installation, an industry which accounts for about 130,000 jobs in the US and depends on using imported panels, which are much cheaper than domestically produced ones, in order to offer affordable services to their customers. By placing a tariff on these imported solar panels, consumers will likely pick up the tab and end up paying more for products, and the increased price tag could seriously hurt the solar industry as a whole.
The Solar Energy Industries Association (SEIA), a trade group, predicts that about 23,000 jobs will be lost in 2018 due to the steep tariffs, and thousands more will follow in the years to come. Abigail Ross Harper, president of the SEIA, said on Tuesday that the organization was very displeased with the decision.
“It’s just basic economics,” Harper said. “If you raise the price of a product it’s going to decrease demand for that product.”
