solar tariff check in

Checking in on the US solar tariffs

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In February 2018, the Trump Administration’s tariffs on imported solar goods went into effect. Now, two years on, the US International Trade Commission (US ITC) just released its mid-term review of the impact of the solar tariffs. Pulling from that report, as well as a study from the Solar Energy Industries Association (SEIA) and an analysis of our own data, here’s a look at how the tariffs have impacted solar shoppers and solar jobs over the last two years. 

The Section 201 tariffs explained

In 2017, two American solar panel manufacturers initiated a proceeding in front of the US ITC (not to be confused with the other ITC – the investment tax credit, one of the best incentives for solar). Ultimately, in September of that year, the US ITC ruled that the availability of low-cost solar goods–specifically solar cells and modules, i.e., solar panels–caused harm to the success of domestic solar panel manufacturers. 

This finding of “injury” to the domestic industry allowed the Administration to levy tariffs against imported solar products, which they finalized in January 2018 to go into effect in February 2018. The tariffs began at 30 percent and were designed to last four years, declining five percentage points per year (i.e., to a 25 percent tariff in year two). The tariffs impact imported crystalline silicon solar cells and panels from all major solar panel producers other than India, with the exception of 2.5 gigawatts of imported solar cells to be used in domestic panel production. 

Initial impact: quarter billion dollar tax on solar shoppers

Before the tariffs even went into effect, the US solar industry began increasing prices to solar shoppers, bracing itself for the impact of the tariffs. In our 2017 Installer Survey, two-thirds of respondents indicated they would increase prices to consumers at least partially in order to cover the costs of the tariffs. According to EnergySage data, this dynamic played out quickly: quoted solar prices to consumers increased immediately after the US ITC found injury to the domestic solar industry, and remained artificially elevated through at least the following June. 

Over those first nine months after the US ITC ruling, solar prices increased by an average of $0.16 per Watt, adding about $1,000 in costs to an average solar shopper. Across all of the residential solar installations from October 2017 through June 2018, the price increase as a result of the tariffs resulted in a quarter billion dollar tax on American solar shoppers. 

solar tariff impact graph

Long term impact: SEIA report finds lost jobs, higher prices

In 2018, the Solar Energy Industries Association published a study analyzing the impact of the Section 201 tariffs on the growth of the solar industry in the US. The findings are bleak: although a few solar panel manufacturers invested in additional manufacturing capacity in the US, from an industry-wide perspective, the tariffs resulted in 62,000 lost solar jobs and $19 billion in lost solar investments. 

The study found that the tariffs contributed to solar prices in the US being 50 percent higher than in the rest of the world, causing the industry to nix the development of enough solar capacity to have powered nearly 2 million homes. Importantly, SEIA points out that it’s not just the economy that has been adversely impacted: America’s progress on reducing carbon emissions has also been negatively impacted by the tariffs, with the lost solar development enough to have effectively reduced the emissions of 5.5 million cars.

US ITC review: high cost, low outcome

Earlier this month, the US ITC released its midterm review of the impact of the 201 tariffs (be forewarned: this link opens as a ~500-page pdf). The tariffs were designed in order to boost domestic manufacturing of both crystalline silicon solar cells and modules. However, according to the US ITC’s report, imports of solar cells and panels actually increased since the tariffs went into effect. The domestic production of solar cells has decreased (and nearly disappeared entirely), while domestic module production did experience a recent uptick in production and jobs after years of decline. 

Overall, the US ITC’s midterm review of the impact of the solar tariffs finds that the tariffs have increased costs to solar shoppers by inflating costs for an increasing volume of imported solar goods, while effectively only resulting in a slight increase in domestic module production and employment. 

A few bright spots in American manufacturing

Since the Section 201 tariffs were initially announced, a number of international solar panel manufacturers have invested in solar manufacturing capacity in the US: Jinko, LG, Hanwha, and Silfab to name a few. Although the solar panel manufacturing capacity of the country remains small in comparison to that of other countries, these manufacturers have contributed to solar jobs everywhere from Florida, Alabama, Georgia and Washington. If you’re interested in purchasing solar panels made in these facilities, register today for a free account on the EnergySage Marketplace, and indicate your preference for American-made solar panels.

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One thought on “Checking in on the US solar tariffs

  1. Daniel Courselle

    For Spencer Fields,
    I am a retired General Contractor. I have a new patented solar roof system applying to all types construction. When applied it is permanent and much lower in cost. I want to mfg. in the USA by Veterans and include the home envelope (SIP’s) also by Veterans to be installed at the same time. Do you have any suggestions? I am 87 and loosing it too fast. Please respond. Thank you. Dan Courselle

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