Trump's
steel and aluminum tariffs also affect effort to build up domestic solar
production.
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| Solar panels go up on my house last December. They've led to dramatically lower electricity bills AND rebate checks from National Grid (caption and photo by Will Collette) |
Trade
wars have unpredictable results, and solar power is a classic case in point.
In
2017, when Trump was considering putting tariffs on imported solar cells and
panels, U.S. companies started buying and stockpiling foreign panels, which
drove up prices. Then in January, the President imposed a 30 percent
tariff.
Domestically, orders
were canceled, and workers were let go, since the industry gets
about 80 percent of its solar panel products from imports.
In
June, Trump imposed an additional
25 percent tariff on imported Chinese solar modules as part of our growing
trade war with that country.
Unexpectedly, on June 1, the Chinese government cut its own solar installation incentives sharply, to slow what the government saw as a domestic market that had been overheating.
Last year alone China added a staggering 53 gigawatts (53,000 megawatts) of new solar capacity — which was more new capacity installed than any other nation had at the start of 2017.
China’s
move had an immediate effect, slowing domestic installation and creating a
global supply glut. Within weeks, global prices had dropped 12 percent.
“If
you are building a large power plant your pricing has certainly come back at
least halfway to what it was pre-tariff, if not all the way,” as SunPower Corp CEO
Tom Werner told Reuters Monday. “It’s muting the impact of
tariffs.”
Prices
could fall up to 35 percent this year. And while that is good news for
those who want to install solar panels, it undercuts the supposed goal of
Trump’s tariffs — to increase domestic production.
The
price drop “makes domestic manufacturing that much more challenging,” said
Werner.
Moreover, while the California-based solar company wants to increase domestic production, it currently makes most of its products in Mexico and the Philippines. So SunPower is trying to get an exclusion from the tariffs.
Moreover, while the California-based solar company wants to increase domestic production, it currently makes most of its products in Mexico and the Philippines. So SunPower is trying to get an exclusion from the tariffs.
“Our
investment in America has been curtailed because we have to pay
tariffs instead of investing,” Werner explained. “We would have added
hundreds of jobs that we’re not going to add until we find out what happens
with our exclusion request.”
One
final complication for the U.S. solar industry are the tariffs Trump put on imported
steel and aluminum, materials which are needed to make the racks that hold
solar panels together. Werner said, “There’s no question it’s had an impact on
the size of the American solar market.”
Trade
wars have unpredictable results.