The Facts About Trump’s Solar Tariffs – Who Gets Hurt? Who Gets Helped?
By John Rogers
The solar-related shoe we've been expecting has finally dropped: President Trump recently announced new taxes on imported solar cells and modules. There's plenty of downside to his decision, in terms of solar progress, momentum and jobs. But will it revive U.S. manufacturing?
What the Solar Tariffs Look Like
First, the what. The tax has come in at 30 percent for the first year (starting this month), then it drops 5 percentage points each year through year four, before going away completely.
The worst of both worlds? The Trump solar tariffs USTR
Imports from most of our major trading partners in this area are covered by this: China, sure, but also Taiwan, South Korea, Malaysia (the origin of the biggest slice of our solar imports in recent times), Canada, Mexico…
Who They Hurt
The downside of this is pretty clear: A tax on imported solar cells and modules raises the prices of those products. And that makes solar more expensive for all of us.
That unfortunate Trump Bump will be felt more in large-scale solar projects, where solar panels make up more of the cost of the project. We're already hearing of projects cancelled or delayed because of the tariffs or, earlier, the specter of tariffs.
But it's not just the large projects: The tariff also makes systems for folks like you and me—rooftop systems or community shared solar—more expensive. Solar will still be as cheap as electricity from your local power company in a lot of states. But other states where solar had just become competitive by that metric will now fall back.
The foregone projects and home systems mean foregone megawatts of solar capacity. Projections say 7,600 megawatts of solar won't happen because of the tariffs over the next five years—more than a million homes' worth—compared to close to 12,000 megawatts installed during 2017. And without that solar, we don't get the benefits that come from that solar.
So that answers part of the "who": The Trump solar taxes hit you, me, our communities and our power system.
Who They Help(?)
Another really important "who" gets right to the heart of the purported purpose of the tariffs: the U.S. solar industry's workforce. The tariff case came about because of a couple of U.S.-based manufacturing operations that were having a hard time competing in the global marketplace. Making imports more expensive helps local producers compete, goes the thinking.
But does it? As that chart above shows, these tariffs are brief, and step down pretty quickly. Don't attribute that to the president's lack of desire to help (or any misgivings on his part about the wisdom of doing this at all): The relevant section of the U.S. trade code limits the "remedy" to four years, and requires it to drop every year.
The tariffs also actually lower than the tax/quota proposals put forth by the U.S. International Trade Commission, which evaluated the original petition.
To be clear, I'm definitely not advocating longer or higher solar tariffs (or any new tariffs at all). But this seems like sort of the worst of both worlds: tariffs that are high enough, at least at the beginning, to dent solar's momentum, but that aren't high enough or sufficiently long-lived to get much in the way of new U.S. solar factories built.
Here's how Bloomberg analyst Hugh Bromley put it:
"Anyone expecting a U.S. manufacturing renaissance as a result of these tariffs is set to be disappointed… A tariff lasting only four years and ratcheting down quickly is unlikely to attract any manufacturing investment that was not going to occur anyway."
And actually, the tariffs may not even last four years: The last time a president tried doing something like this (for steel, in that case, in 2002), the tariffs lasted less than two years (and damaged other sectors of the economy) before the U.S. pulled the plug because of World Trade Organization issues. And the legal action against these new import taxes has already started, with several Canadian companies filing suit earlier this month.
Moves like President Trump's can also prompt retaliatory action. U.S. makers of the polysilicon that solar cells are made from are still suffering from the tariffs that China put on those materials when the Obama administration put its own taxes on Chinese solar (in reaction to perceived dumping of products below cost).
Who They Hurt, Part II
In the meantime, the U.S. solar workforce has to deal with the reality of President Trump's decision. While solar employment has been impressive (and a whole lot more impressive than coal's), last year, for the first time since data started being collected in 2010, we lost solar jobs—10,000 out of 260,000, or 4 percent.
The Trump tariffs are only responsible for a piece of that—the cooling-off after a big solar push in 2016 was a big factor—but the uncertainty that the trade case provoked, the rise in prices in anticipation of tariff action, and our president's unpredictable nature sure didn't help.
The tariffs do look to be a big factor for jobs in the near term, and not in a good way there either. The Solar Energy Industries Association (SEIA), calling the president's decision "a loss for America", is projecting 23,000 fewer US solar jobs this year than under business as usual because of the higher prices. That drop equals more than 10 times the number of current U.S. solar cell/module manufacturing workers, meaning we'd have to have an incredible amount of growth in manufacturing just to make up for the losses elsewhere.
Sure looking like pain without gain.
So, where does that leave us?
On balance, these new tariffs aren't likely to be a good thing. It's pretty clear that the policy itself will cost more American jobs than it'll fuel. The higher prices will drive some projects and people out of the market. And anything that disrupts solar's incredible momentum is unwelcome.
Whether U.S. manufacturing will experience a resurgence depends on a lot of factors, with the new tax being just one part. We'll hope for the best on that count, but I'm not sure I'd put my money on it. (If you're looking to invest, there are plenty of other opportunities to get a piece of the action, given that the U.S. solar industry is about so much more than cell/module manufacturing).
However it plays out, solar as a whole is strong, powerful, irresistible. The industry—and many customers—will persevere. The tariffs will hurt (and already have), and may help very little. At a recent solar conference, though, I heard one analyst say the tariffs would be "impactful, but not devastating," and another call this "a speed bump, not a brick wall," forcing solar to slow down, but not stopping it. Lots of other forces and needs are pushing solar to accelerate instead.
So drive on, solar. We're with you.
John Rogers is a senior energy analyst with expertise in renewable energy and energy efficiency technologies and policies.
- Thom Yorke of Radiohead Releases Song With Greenpeace to Help ... ›
- Patti Smith, Thom Yorke, Flea and More Featured on Just Released ... ›
- Musicians and Activists Unite at 'Pathway to Paris' - EcoWatch ›
EcoWatch Daily Newsletter
A national park in Thailand has come up with an innovative way to make sure guests clean up their own trash: mail it back to them.
- Supermarkets in Thailand and Vietnam Swap Plastic Packaging for ... ›
- Malaysia Sends Plastic Waste Back to 13 Wealthy Countries, Says It ... ›
- Thailand Begins the New Year With Plastic Bag Ban - EcoWatch ›
- Coronavirus Worsens Thailand's Plastic Waste Crisis - EcoWatch ›
- Marium, Thailand's Beloved Baby Dugong, Is the Latest Victim of ... ›
By Ilana Cohen
Four years ago, Jacob Abel cast his first presidential vote for Donald Trump. As a young conservative from Concord, North Carolina, the choice felt natural.
But this November, he plans to cast a "protest vote" for a write-in candidate or abstain from casting a ballot for president. A determining factor in his 180-degree turn? Climate change.
Fractures Among Young Climate Conservatives<p>While young conservatives have united around the urgency of climate change, they remain divided over how to bring their concerns to the ballot box. Some embrace right-wing <a href="https://www.washingtonpost.com/politics/biden-attacks-republican-convention/2020/08/24/434e5b46-e66d-11ea-970a-64c73a1c2392_story.html" target="_blank">attacks</a> painting Biden as a "tool of the left" and find his climate agenda "radical." Others can't find a way to justify voting for Trump, even if it means breaking with their party.</p><p>Patrick Mann from Orange County, California, voted for Trump in 2016. But today, he's leading Aggies for Joe at Texas A&M University and is co-founder of Texas Students for Biden. </p><p>Mann grew up watching wildfires ravage his home state, nearly forcing his family to evacuate in 2017. The GOP is failing to "meet the moment" for climate action, Mann said. He's hoping Biden will deliver on a promise to "<a href="https://www.desmoinesregister.com/story/opinion/columnists/caucus/2020/01/06/joe-biden-democrat-president-iowa-caucus-restore-soul-our-nation/2806422001/" target="_blank">restore the soul of our nation</a>." </p><p>Taylor Walker from Pensacola, Florida, is also determined to make her voice heard on climate, including by casting her first-ever vote for president—but not for Biden.</p>
A False Equivalency<p>Young climate conservatives may fear climate denial and delayed climate action, but more than that, they fear the growing political momentum around the Green New Deal, the massive spending it entails and <a href="https://joebiden.com/climate-plan/" target="_blank">Biden's citing of it</a> as a "crucial framing for meeting the climate challenges we face."</p><p>Many don't want to split with their party to support a Democrat whose <a href="https://www.npr.org/2019/09/03/757220130/joe-biden-on-bipartisanship-gun-control-and-regrets-over-inaction-after-a-traged" target="_blank">allegedly bipartisan intentions</a> they doubt. If stymieing what they consider a radical green agenda means re-electing a climate change denying president, so be it. </p><p>"I'm scared of climate change, but I'm also scared of the Green New Deal and what it means for America," said Ben Mutolo, a republicEN spokesperson and junior at SUNY College of Environmental Science and Forestry. </p><p>Mutolo felt encouraged by former Ohio Governor John Kasich's <a href="https://www.rollcall.com/2020/08/17/kasich-speech-to-democratic-convention-follows-years-of-building-conservative-credentials/" target="_blank" rel="noopener noreferrer">appearance</a> at the Democratic National Convention, but he still struggles to see himself voting for Biden. Though the candidate paints himself as a <a href="https://www.latimes.com/politics/story/2020-08-12/harris-biden-different-generation-similar-political-instinct" target="_blank" rel="noopener noreferrer">centrist,</a> Mutolo believes he's "cozying up to the ultra-progressive left." </p><p>Mutolo, who wants to see market-based climate solutions like a carbon tax, feels torn between a candidate whose climate plan relies on taking an "<a href="https://joebiden.com/environmental-justice-plan/#" target="_blank" rel="noopener noreferrer">All-of-Government approach</a>," and one with no efforts to reign in global warming at all. <span></span></p><p>Leiserowitz said he appreciated how a conservative might feel Biden's climate plan "doesn't jive with their limited government, free-market approach."</p><p>But he sees a strong distinction between voting for a presidential candidate with a <a href="https://www.nytimes.com/2020/07/14/us/politics/biden-climate-plan.html" target="_blank">$2 trillion climate plan</a> that includes large renewable energy investments, which have <a href="https://climatecommunication.yale.edu/publications/politics-global-warming-april-2020/" target="_blank" rel="noopener noreferrer">bipartisan support</a>, and a candidate trying "to take the country in the opposite direction, towards more fossil fuels."</p>
- 7 Republicans Joined Senate Democrats in Vote to Fight Climate ... ›
- Climate Change Acknowledged by Increasing Number of ... ›
The World Health Organization (WHO) announced Monday that 64 high-income nations have joined an effort to distribute a COVID-19 vaccine fairly, prioritizing the most vulnerable citizens, as Science reported. The program is called the COVID-19 Vaccines Global Access Facility, or Covax, and it is a joint effort led by the WHO, the Coalition for Epidemic Preparedness Innovations (CEPI) and Gavi, the Vaccine Alliance.
- Trump Denies CDC Director's 2021 Timeline for Coronavirus Vaccine ›
- CDC Tells States to Prepare for a Vaccine Before November Election ›
- Fauci Warns Pre-Pandemic Normalcy Not Likely Until Late 2021 ... ›
By Gloria Oladipo
In the face of dangerous heat waves this summer, Americans have taken shelter in air conditioned cooling centers. Normally, that would be a wise choice, but during a pandemic, indoor shelters present new risks. The same air conditioning systems that keep us cool recirculate air around us, potentially spreading the coronavirus.