Skip to main content

Trump tariff on imported solar panels at 30% – residential projects could increase $750-1000, cost up to 23,000 jobs

The Trump administration released its official ruling regarding the Suniva Section 201 case, and stated that they agree that the nation’s solar industry has taken damage as a result of global solar actions.

The administration has chosen to impose a 30% tariff on all imported solar cells and solar panels, decreasing 5% a year for four years. The first 2.5GW of solar cells imported will not be tariffed, to protect the domestic solar panel industry.

The tariffs are far below what Suniva and SolarWorld requested.

The administration released its thoughts on the Section 201 case via a fact sheet: Section 201 Cases: Imported Large Residential Washing Machines and Imported Solar Cells and Modules. The document’s first half is associated with washing machine imports, while the second half focuses on the Suniva trade case.

If Tesla and Panasonic can get their solar cell and panel manufacturing going in Buffalo, it won’t pay any tariffs. Either way, the first 2.5GW of solar cells imported aren’t tariffed – so, long term, Tesla might have dodged a bullet even if they plod along.

Interestingly, even though Tesla would have benefited from this tariff because of Buffalo, they lobbied against it.

According to one group, the tariff applies in about 15 days – but could be extended to start in 90 days.

The SEIA believes this tariff could cost up to 23,000 jobs.

Greentechmedia and the SEIA suggested that the USA would lose up to 80,000 jobs if the 40¢/W tariff that Suniva asked for was applied. This tariff is less than half of that for the high end market, and one quarter in the low price, high volume market.

Greentechmedia suggested a 10¢/W tariff would slow the solar industry by 8.3%.

Both Suniva and SolarWorld have suggested that they’d go out of business without very high tariffs.

Electrek’s Take

This tariff will affect the cheapest solar panels the least, since they’re already priced the lowest. Thus, utility-scale installation groups – who buy panels at 35¢/W will bear the least consequences: a project price increase of approximately 10-11¢/W. Not a terrible number for the big players.

Groups that buy higher efficiency solar panels – most American residential customers and some smaller commercial systems – will pay a greater cost. Since higher efficiency panels tend to cost most, a 30% tariff on them will be greater. For instance, an LG or Panasonic panel, maybe a cutting edge bifacial monoPERC, that costs closer to 50-70¢/W at import, will see a price increase of 15-21¢/W.

Something at the ultra high end like a SunPower at $1/W – will see an increase of 30¢/W. This is a painful number, totally inappropriate for a US based company who gained nothing from Chinese banking favors.

That 15-21¢/W applied over the average system installation size of 5,000W, will mean an additional cost of $750-$1,050. If the average system is the USA costs $3/W – this increase on just the solar panels will be approximately 5-7% on the overall system price.

A 5kW, on average (this varies greatly acorss our country with different prices of electricity and sunlight), will produce about $1,000/year in electricity revenue (excluding incentives).

Interestingly – the 30% Federal Tax Rebate – will be applied after the tariff increase is applied. That means, your system will increase in price – not the full 5-7%, but actually more like a 3.5-4.9% because you’ll get a 30% Federal Tax Credit knocked off of your 30% Federal Solar Panel tariff.

Makes total sense./s

There is also the chance that this ruling goes to court and is overruled by the World Trade Organization. The USA is definitely giving benefit to local manufacturers, which is against the rules of the WTO.

Regarding jobs – it is estimated to take 500-1,000 people to run a factory that manufactures 1GW of solar panels a year. The USA used 14.5GW in its biggest year. That means, even if the USA were to move 33% of its panel manufacturing onshore due to this, VERY LOW PROBABILITY, we will gain only 5,000 jobs versus the 23,000 the SEIA think we will lose.

In reference to the 23,000 jobs – I don’t think it will be that bad. I think panel prices will continue downward – meaning the amount of the tariff will also decrease. Soft costs will have to tighten a bit. Energy users will see a slight increase in prices. But a true 10-15% fall in employment, don’t feel it.

My opinion – this tariff will not motivate Chinese manufacturers to build in the USA because ‘cheap’ products bear lesser consequences. It will give the USA’s higher end manufacturers of solar panels – focused on the residential market – some serious breathing room though. 15-21¢/W is a lot of margin for the 18 or so groups that manufacturer solar panels in the USA.

I think the larger effort to go solar in the USA won’t be slowed as utility-scale and large commercial will see a minimal price increase. The upper efficiency half of the residential market will be hurt in strategic states that were on the edge – South Carolina for instance. The lower efficiency half, less affect.

I forecast that the US solar industry will absorb this 5-10% increase in system price by the end of 2018.

Considering residential solar? Understand Solar will connect you with local contractors, Tweet Me an I’ll give you some feedback or allow me to give you a professional residential consultation that will save you money.

For more electric vehicle, autonomous transport and clean technology news, make sure to follow us on Twitter, Newsletter, RSS or Facebook to get our latest articles.

FTC: We use income earning auto affiliate links. More.

Stay up to date with the latest content by subscribing to Electrek on Google News. You’re reading Electrek— experts who break news about Tesla, electric vehicles, and green energy, day after day. Be sure to check out our homepage for all the latest news, and follow Electrek on Twitter, Facebook, and LinkedIn to stay in the loop. Don’t know where to start? Check out our YouTube channel for the latest reviews.