Daily Trends Now
Daily Trends Now

Trump's Solar Tariffs Won't Kill the Industry

Trump's Solar Tariffs Won't Kill the Industry

In a statement, U.S. Trade Representative Robert Lighthizer said President Trump has approved the tariffs based on recommendations from "the independent, bipartisan U.S. International Trade Commission that increased foreign imports of washers and solar cells and modules are a substantial cause of serious injury to domestic manufacturers".

The new charges, pitched on Monday by the White House as relief for domestic manufacturers, are instead being slammed by U.S. solar industry groups as an effort to destroy the solar energy market in America.

MJ Shiao, GTM's head of Americas Research, explained in an interview that the states hurt the most by the new tariff are the "hot markets that are on the cusp of becoming economic for solar", or that just became economic thanks to the steady and rapid price drops for solar cells and panels.

The move is in line with President Trump's "America First" trade policy. Most of these products, SolarWorld has argued, come from China, which has seen a 700 percent increase in exports of solar panels to the USA during that time, according to International Trade Commission data.

The Solar Energy Industries Association, a trade group, estimates that the tariffs will eliminate 23,000 jobs this year and lead to the cancellation of billions of dollars' worth of solar investments.

The tariffs imposed could lead to higher costs for both products. That migration has resulted in lower-priced solar projects, which is helping to drive consumer demand because the time to recoup upfront installation costs is shorter than ever.

A spokesman said the administration would "always defend American workers, farmers, ranchers and businessmen".

Kadish says the vast majority of people working in the solar industry are installing the panels.

She said that "only strong global trade with open markets provides growth, jobs and innovation".

For large residential washing machines, tariffs will start at up to 50 percent and phase out after three years.

In 2016, 40 percent of the renewable energy generated in Arizona was solar, according to the U.S. Energy Information Administration. Germany's subsidies for solar started in the early 2000s, making it the biggest manufacturer and installer of panels for nearly a decade.

In other words, the tariffs are definitely not welcome, and definitely damaging to the solar industry, but they don't amount to an existential threat.

"The investment tax credit for solar is 30 percent of capex [capital expenditure]", Amy Grace, head of North American research for BNEF, explained - so 30 percent of any tariff-driven price increase gets paid back through the tax code.

Research firm Wood Mackenzie estimated that over the next five years the tariffs would reduce USA solar installation growth by 10 to 15 percent.

The relief will include a tariff of 30 per cent in the first year, 25 per cent in the second year, 20 per cent in the third year, and 15 per cent in the fourth year.

Other U.S. solar stocks were mixed.

While Bell Labs in the US invented the modern photovoltaic cell in the 1950s, the industry has flourished elsewhere since.


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