President Trump’s New Solar Panel Tax
Last week saw a major trade development: President Donald Trump’s new solar equipment tariff.
In the U.S., solar energy is a rapidly growing industry. However, about 80% of the parts used to make solar panels in the United States are imported from other countries, mostly Asian countries.
The new tariff approved by Trump will tax these imported goods. Last Monday, the President approved a four-year tariff that starts at 30% and gradually declines to a 15% tax.
Reaction to this new tariff has been mixed, with some saying that this will hurt American solar companies and workers, and others saying that this will bring more solar manufacturing to the U.S. and be a boon for the economy.
Why The Tariff?
Trump has stated that he implemented this tariff to protect American manufacturers. Theoretically, the increased cost of foreign solar parts could cause more American solar companies to buy from American manufacturers. It could also potentially bring more solar manufacturing to the United States.
Critics of the tariff say, however, that the tariff will hurt the economy and American jobs, and that the President has other motivations for approving it. Some critics have suggested that Trump’s new tariff is another part of Trump’s war on renewable energy, an industry Trump has not been supportive of during his presidency. For example, his tax reform bill included financial constraints for solar and wind companies, he pulled the U.S. out of the Paris Agreement, and he has stated that he wants to roll back power plant emission laws.
Other critics see the new tariff as a Trump acting on his promise to be tough on China, a major producer of solar cells.
American Solar Reacts To Trump’s Tariff
The American solar industry’s reaction to this decision has been split. American solar parts manufacturers see it as something that will help business, while American solar companies that import parts see it as a negative that will increase their costs and cause widespread job loss.
The Solar Energy Industries Association has estimated that the new tariffs could cause the loss of 23,000 jobs as American solar companies deal with the rising costs of doing business. This job loss is unlikely to be offset much by job gains in the manufacturing industry, which requires fewer workers due to the automated nature of production.
The increase in solar parts cost will also likely cause an increase in solar panel prices, with some estimating prices will go up 3-10%. Industry growth and research is also likely to slow as businesses focus on adjusting to the rising costs.
The Future of Solar in the US
While many solar industry insiders are worried about the impact of the tax, others remain positive that this new industry will adapt to these changes and continue to grow.
Though speculation about the future of the industry is widespread right now, the true impact of the new tariff will only be seen with time.