President Donald Trump shocked the industry on Monday after his administration decided to impose tariffs on up to 30 percent of imported solar panels. The move came as an attempt to help the American solar panel industry by supporting domestic manufacturers.
Reactions to the announcement vary from complete despair for the solar industry to those who think the news won’t affect solar manufacturers very much, if at all.
Trump Delivers Another Blow to Clean Energy
One thing is for certain, Donald Trump’s administration ran on a political campaign determined to reduce environmental regulations. He began by promising to preserve the coal industry in favor of funding innovations in solar or wind energy and then attempted to eliminate loads of environmental regulation.
Republicans across the nation have also been attacking renewables on a wide scale. From market interventions to supporting a tax bill that subsidizes coal-fired plants, the onslaught on clean energy has investors worried. The resulting decline in clean energy investments will slow production and sales for renewables.
The question remains: With the current administration so keen to boost fossil fuels and limit growth in the solar and wind sectors, do critics have solid reason to be afraid for the future of solar and wind energy?
Will the Tariff Actually Help American Business?
President Trump may be making these types of moves in an attempt to reinvigorate U.S. manufacturing, but numerous U.S. solar manufacturers are foreign-owned. So, even if domestic companies here see an increase in profit, most of the wealth is flowing back to other countries.
Reasons that Solar Power could be great for U.S. companies:
- If solar costs decline, the price of electricity will also fall. Even if electricity consumers don’t switch to solar panels, the gas, oil, and coal companies will be forced to lower prices to meet market pricing.
- As the price of electricity drops, so does the cost of doing business for many US manufacturers. Solar energy trends show that prices are due to drop steadily, which makes them a great investment for business owners. In turn, they can use their new savings to further grow their companies!
- The new tariffs could pose a threat to businesses by slowing down the transition to clean energy.
Why would a business move to solar or wind power when gas prices have dropped due to new subsidies?
Tariffs Aren’t a Problem—the Industry is Growing Too Fast
On the flip side of the public reaction, there are those who aren’t worried in the least! They argue that the industry has already shown significant growth and that a change like this cannot possibly halt the steady progress made within the past decade.
The import tax will hurt U.S. companies, because most of the solar panels in the states are imported, but the overall change will be small because the manufacturing cost of solar panels are dropping rapidly.
In fact, a 2017 solar module producing one watt of power only costs around a fifth of the price of what it cost in 2010.
As information continues to pour in about the projected outcome for this new decision, customers, manufacturers, and sellers alike will be waiting to see how the industry is affected. For now, it is best to remain optimistic, because the data shows that solar energy is strong and continues to grow despite numerous setbacks!