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New Solar Tariff Imposed on Imported Modules

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The Tariff and Rates

On January 22nd 2018, President Trump issued an order for a 30% tariff on imported solar cell and modules (mainly from Asia into the United States).

The solar tariff will begin at 30% during year 1, and decline at a rate of 5% every year for a total of 4 years as listed on the order. During these four years, 2.5 gigawatts of the first imported cells and modules each year will be excluded from the new tariff – for a total of 10 gigawatts. See U.S. Trade Representative Section 201 Cases Fact Sheet.

Here’s what the new Solar Tariff rates will look like:

Source: USTR

Reasons for Implementation

USTR noted that China’s industrial planning "has included a focus on increasing Chinese capacity and production of solar cells and modules, using state incentives, subsidies, and tariffs to dominate the global supply chain."

China’s state directed initiatives resulted in a major increase in share of global solar cell and module production, moving their market share from 7 percent in 2005 to 61 percent in 2012. As of now, China currently manufactures 60% of solar cells and solar modules globally.

The tariff comes after lobbying efforts from PV module manufacturers SolarWorld and Suniva filed a petition in May 2016, under Section 201 of the Trade Act of 1974, surmising that an increased number of imported solar panels had caused and resulted in “serious injury” to the domestic U.S. industry.

Greater Effect on Market and Our Solution

While these new set of tariffs may decrease 2018 and 2019 solar installation by 11%, some companies are considering building manufacturing plants in the United States, as the tariff provides incentive to design, build and supply domestic solar panels to be sold locally.

The Solar Energy Industries Association said this decision will cause the loss of roughly 23,000 American jobs this year, including many in manufacturing. It’s indicated that we will see an increase in solar module costs by 10 to 12 cents per watt, based on current U.S. import prices of 35 to 40 cents per watt.

We believe Solar Panels should continue without tariffs for the United States, and incentives on newly built manufacturing plants be implemented. However, solar has proven to be a valuable and intelligent investment option whether at residential or commercial scale projects – and the newly imposed tariffs we do not see stopping the continued growth of solar in the U.S.

As the new solar tariff is implemented, we are instead offering a Solar Panels Tariff Special throughout the month of February 2018, to better offer a substantial deal for our installers and DIY homeowners looking to go solar this year and want to enter in at a great price point.

See Solar Pre-Tariff Specials here.



 

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