Blinded By The Light: The Solar Panel Tariff.

The news of a solar panel import tariff broke so quickly and out of the blue that even geeks like me who closely follow alternative energy news & policy were caught off guard. There are a few things off grid amateur radio operators need to know about the solar panel tariff.

The basics.
In May 2017 two American-based solar panel companies, Sunuvia and Solar World, filed an unfair trade practice complaint under Section 201 of the 1974 Trade Act against Chinese solar panel manufacturers. In basic terms, the plaintiffs alleged that China was “dumping” solar panels onto the American market at artificially low prices, thereby making American manufactures uncompetitive.

Alleged Section 201 violations are not litigated in court. Instead, the US International Trade Organization investigates the claims. The board then determines if the plaintiff has a legitimate case and recommends what, if anything, should be done. The US ITO can only suggest financial penalties (tariffs). As they are not a formal court, they do not have the authority to adjudicate alleged violations of other laws. US ITO conclusions are then passed along to the President, who without any requirement of Congressional consent has the unilateral authority to impose, partially impose, or dismiss the suggested penalties.

In September 2017 the US ITO board voted 4-0 in favor of the plaintiffs and moved on to the next phase of the process, recommending penalties. They have concluded with the penalty phase and sent their suggestions to the President as prescribed in Section 201.

That brings us to today. President Trump affirmed the ITO conclusions and signed an order that will impose tariffs on imported solar panels.

Placing it in context.
The mainstream media is promoting this as “Trump’s solar tariff” or the “Trump import taxes” or some similar wording. The President cannot just arise one morning and decide to impose solar panel tariffs. This process started over a year ago and has been throughly investigated by an independent agency. President Trump simply concurred with the US ITO report and signed off on the suggested tariffs. Closely associating Trump’s name with it implies he did this all by himself. It’s at best sloppy journalism and at worst deliberate media bias.

tariff

PHOTO COURTESY OF SHUTTERSTOCK.COM

Whether or not this action is good or bad depends on who you ask and what your politics are. The plaintiffs are of course quite happy. And those who believe foreign nations undercut American jobs with labor and environmental standards that would be illegal (in some cases criminally illegal) in the United States will get a lot of gratification out of this decision. Lastly, the irony of one of the plaintiffs (Sunuvia) being a Chinese-owned subsidiary company should not be lost on anyone.

Professionals in the solar industry, installation contractors in particular, are alarmed. They are predicting a crash in solar expansion in the USA and a heavy loss of renewable energy jobs along with it due to a forecasted increase in the price of solar panels. Environmentalists are upset that fewer solar installations will mean more pollution.

Statements in the media that “the cost of solar panels will jump thirty percent!” are not completely untrue, but they are oversimplified. Some industry trade groups and experts are even claiming that the cost of solar “will double”. There is more to the story. The tariffs begin at $0.37/watt for assembled panels and go down to $0.33/watt over four years, after which the tariffs expire. Individual imported solar cells (from which panels are made) will have no tariff for the first 2.5 gigawatts. That’s not a lot considering last year just over 11 gigawatts of solar was deployed in the USA.

What you need to know.
I understand it’s a real buzzkill for those hoping to start their own systems or expand existing systems, but keep in mind that we’ve had artificially low prices on solar panels for a long time and the sweet deal could not last forever, tariff or not. I’m not going to spin the solar panel tariff as anything other than a setback, but it’s something that probably had to be. And for those who believe in “economic patriotism”, paying more to support American workers is worthwhile.

The cost of solar panels is going up, at least for a while, but I think prices will come back down as American manufacturers implement economies of scale. If you have been on the fence about going solar, hurry up and buy before the retailers update their web sites. Things are going to happen fast.

One of Off Grid Ham’s missions is to show radio amateurs how they can get the most for their money and that alternative power is practical and useful. That goal is not out of reach because of this tariff. In fact, it makes the OGH mission even more relevant. I’m committed to finding a way to make it happen and documenting everything on this website, so I hope you’ll stay with me and invite your friends to check out what we’re doing here.

6 thoughts on “Blinded By The Light: The Solar Panel Tariff.

  1. randall krippner

    Very glad to hear a good explanation of how and why this happened, something that hasn’t been going on in the media. Most of the news outlets have been ignoring the fact that this has been in the works since before Trump was elected. All he did was sign off on the recommendations of the panel. We tend to forget that the news media is not in the business of telling us the news. It’s in the business of making money for the corporations that run them. And to maximize their profits they have to get our attention, hence we end up in this endless cycle of clickbait headlines, reports that emphasize the worst case scenario rather than what probably will actually happen, etc. The solar tariff will hurt, true, but it’s highly unlikely it will “put tens of thousands of employees out of work” as I heard on one story yesterday. Nor should it discourage people from trying to use alternative sources of energy. There are always deals out there if you keep an eye out at places that sell surplus and discontinued merchandize like eBay, Woot, etc. It may take a while and it may not be exactly what you want, but if you’re creative you can make it work. Thanks for explaining what really happened.

    Reply
    1. Chris Warren Post author

      Hi again, Randall. As I already said, there is no positive spin for a roughly 30% price spike on solar panels, but as you correctly point out one must keep things in perspective. For example, if you were looking to buy a 100 watt panel for a small radio system, and suddenly now that panel cost $37 more than it did last week, yes that sucks, but is it a deal breaker? Is anyone going to walk away over thirty seven dollars? For larger systems, the panels are only a small part of the whole cost, even with the tariff added. A few hundred dollars added to a project that runs many thousands is not going to sink the deal. I’m not defending this tariff, I’m just trying to put it in context. No matter what happens, Off Grid Ham will be here keeping it real. Thanks for your comments & 73.

      Reply
  2. George

    Good explanation. Thank you! I just found your blog and added it to my favorites list. Getting my shack off grid is on my 2019 plan, so I’ll be reading your other posts. 73, from a former Glen Ellyn resident (back when DuPage was Republican).

    Reply
    1. Chris Warren Post author

      Hi George, and welcome to Off Grid Ham. I hope I’m helpful in getting you to your goal. And yes, I’m very familiar with Glen Ellyn. Haven’t been there in years, but I was a student at College of DuPage, once upon a time.

      Reply

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