In 2018, President Trump signed a proclamation placing tariffs on foreign-made solar panels and inverters, with the tariff starting at 30%, stepping down 5% each year and ending after four years. The tariffs were “designed” to boost U.S. manufacturing and stop unfair competition from foreign countries (mostly China) and, while we have seen a tiny uptick in U.S. manufacturing of solar panels, the real effect (and let’s be honest, the true intended goal) of the tariffs has been to slow the deployment of solar in the U.S. by keeping prices artificially high. We think it’s time to end the solar tariffs – especially given the pandemic-impacted economy – so that the industry can continue to grow and thrive.
The Solar Energy Industries Association recently released a report, “The Adverse Impact of Section 201 Tariffs,” detailing the impact of the tariffs on solar cells and modules. In short:
• 62,000 fewer jobs (workers laid off or never hired) from 2017-2021
• 10.5 gigawatts of solar capacity lost
• $19 billion in private sector investment lost
• U.S. solar module prices now among the highest in the world
While the tariffs have resulted in a few solar panel manufacturers coming to the U.S., the effect has been limited and, instead, have resulted in stagnant prices for solar panels here (instead of rapid decreases, like those before these policies were in place). If the components are more expensive, then solar energy projects are going to cost more: the SEIA report notes that prices for solar panels in the U.S. are 43-57% higher than the global average. When things cost more, they tend to reduce demand – and that’s exactly what has happened.
SEIA asserts that, due to the tariffs, more than 10.5 GW of solar installations will not be deployed. Not only does this impact the jobs market and economy, it also impacts our progress in addressing climate change.
In order to promote solar manufacturing AND solar installation nationwide, we propose a two-pronged approach to the problem:
1. Eliminate tariffs on imported solar panels, wafers, inverters and other equipment currently taxed under the section 201 tariff regime
2. Create tax benefits for manufacturers who bring solar manufacturing to the U.S or who are already based in the U.S.
Together, these two policies will have the effect of protecting U.S. manufacturers and keeping the U.S. competitive in the fast-changing international market for solar PV manufacturing, while simultaneously reducing the installed price of solar across the country and, thus, increasing the rate of solar adoption nationwide.
Who doesn’t want wore solar, more jobs, more investment, and less burning of fossil fuels? With this policy doubleheader, everybody – including the Earth – wins.