A week ago today marked the end of the window for solar companies to seek exemptions from the Trump administration’s tariffs on certain imported solar panels and modules, which the president announced in January.
Since the January decision, companies submitted over 260 applications and comments arguing that they should be exempt from the new tariffs. The tariffs are scheduled to last for three years and will start at 30 percent (with the first 2.5 gigawatts worth of solar cells being exempted), and then decrease each year thereafter.
The tariffs have already taken a toll on the solar industry. The Solar Energies Industry Association reported that “18 companies have informed [us] that they plan to cut their deployment or workforce this year. One company is even canceling a planned $1.5 billion investment, one company has already cut 250 jobs and incurred $20 million in ‘restructuring costs,’ and another company is no longer moving forward on plans to hire hundreds of workers for several large-scale projects.”
The Solar Energies Industry Association anticipates a loss of 23,000 solar jobs this year, coupled with the loss of billions of dollars’ worth of investment due to the tariffs. For perspective, in 2016 out of the 260,000 jobs in the solar industry, only 2,000 were solely focused on the manufacture of solar panels—the jobs that are allegedly being saved by tariffs, but at the expense of others in the solar industry and industries that support it. In 2019, solar companies expect to feel the full effect of the tariffs as stockpiled solar panels begin to run low.
One such company is NextEra, based out of Florida. NextEra reportedly stockpiled the panels it needs for projects in 2018 and 2019 before the tariffs went into effect.
In fact, even if the U.S. solar cell manufacturing industry were operating at full capacity to replace the loss of foreign imported solar panels, U.S.-based manufacturers would likely only be able to meet 20 percent of the U.S. market demand.
The solar industry in America can provide customers the best, most affordable services when it is able to access components from the most competitive companies around the globe. Tariffs make it harder and more expensive to access competitive products.
The president imposed the new solar tariff with the goal of protecting American manufacturers from Chinese competition. But in reality, it was two failing solar companies—Suniva and SolarWorld— that took advantage of that goal to gain special treatment for themselves by petitioning for the tariffs.
Driving up the price of solar panels to save two failing companies, at the expense of thousands of American workers and customers, is not the answer. As The Heritage Foundation’s Tori Whiting has written, other countries “might be the target, but Americans will be among the victims.”
Policymakers should pay attention to and learn from the unintended consequences of tariffs on U.S. companies and customers.