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Why the Solar Tariff Slows Clean Energy Progress and Hurts California Workers

, senior analyst, Clean Energy | January 24, 2018, 9:48 am EDT
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Yesterday President Trump imposed a new tariff on imported solar photovoltaic (PV) cells and modules. More than 80% of all US solar installations rely on foreign solar modules, mostly from Asia.  The intent of President Trump’s tariff is purportedly to give made-in-the-USA solar panels a boost and support US solar manufacturers. The problem is, of the approximately 260,000 solar jobs in the country, only about 8,000 are in manufacturing. So increasing the cost of solar panels for the majority of US solar companies will have a negative impact on workers that install, operate, and repair solar equipment. The Solar Energy Industries Association (SEIA) estimates that more than 20,000 US solar workers could lose their jobs. What’s worse, it’s also likely that the tariff does not go far enough to rescue the companies and workers making solar modules in the US. So, the whole package is a loser for US jobs and clean energy. Sad.

What does the solar tariff do?

The decision imposes a 30% tariff on imported cells and modules in 2018, and declines 5% each year for 4 years, settling at 15% by 2022. The first 2.5 GW of imports are excluded from the tariff every year. GTM Research estimates that a 30% tariff amounts to an additional $0.10-$0.15/watt. For those wanting more details on the tariff and its potential implications for the US solar industry, SEIA put together an informative frequently asked questions webpage.

What does this mean for California?

California has the largest solar market in the country and accounts for more than one-third of workers in the US solar industry.

Source: Solar Jobs Census 2016, Solar Foundation

More than half of those jobs are installing solar modules, which means that these workers become vulnerable, solar costs rise, and as a result fewer people decide to put solar panels on their homes and businesses.

Solar jobs and solar installations have grown rapidly in California in the past few years because we have strong policies in place to promote clean energy investments, but also because scaled-up solar cell manufacturing around the world has helped bring prices down dramatically, making solar PV competitive–and sometimes cheaper–than natural gas generation.

Source: Lazard; Levelized Cost of Energy Analysis 2017

If the Trump Administration wants to protect US workers, making things more expensive for the great majority of the solar industry is not the way to go. According to the Solar Foundation’s 2016 National Solar Jobs Census, the solar industry created jobs in 2016, 17 times faster than the rate of job growth for the overall economy, and accounted for nearly 2% of the 2.07 million jobs added by all US employers in 2016, equal to one in every fifty new US jobs.

Is this really about saving a few thousand solar jobs or about stalling meaningful progress to lower greenhouse gas emissions and fight climate change? To me, it looks like another reason why California’s leaders and not the federal government must continue to lead the world on climate change and clean energy policies.

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