On Monday, the Trump administration slapped new tariffs on solar-panel imports that could increase the costs of buying solar equipment made abroad by as much as 30 percent. The idea is to bolster U.S. manufacturers and give them more potential to grow and add jobs, but in reality, this is a myopic strategy that fails to really consider what the solar-energy industry is and how it grew so fast.
For a nearly a decade now, a few U.S. manufacturers—most notably the U.S. division of German-owned firm SolarWorld, and Georgia-based Suniva—have lobbied against what they see as cheap panels made in China that undercut their efforts to sell the same supplies to solar-energy companies at home. While the solar panel–installation industry has been booming, the domestic solar-panel manufacturing sector has been gnashing its teeth while it slides into failure.
This has caused conflict since well before Trump. As Will Oremus explained in a 2014 piece for Slate, “the U.S. government wants Americans to buy solar panels, and it subsidizes those purchases through rebates and incentives. The Chinese government wants Chinese companies to build solar panels, and it subsidizes their manufacture.” But even though this situation has the potential to be mutually beneficial, neither country can accept that good deal. For years, the U.S. has instead imposed tariffs specific to Chinese imports, while China has bypassed the taxes by moving production to other countries and exploiting other loopholes, and so on.
Monday’s move comes a few months after the U.S. International Trade Commission ruled, at the behest of a complaint brought by SolarWorld and Suniva, that imports from China and elsewhere were harming U.S. companies. That ruling gave Trump the excuse to close said loopholes by imposing a stiffer, robust tariff on all solar-panel imports. SolarWorld is happy with the decision, and Suniva said in a statement, “Today the President is sending a message that American innovation and manufacturing will not be bullied out of existence without a fight.”
But the biggest reactions to the new tariffs have been anger and frustration, because while the decision will be good for solar-panel manufacturing in the U.S., it will not be good for installation. At stake is the continued growth of what is currently a $29 billion industry. The solar-energy industry relies on parts made abroad for about 80 percent of its supplies—and those cheap panels have been the main reason solar power is the fastest-growing source of new energy.
The solar industry has been growing at an annual rate of nearly 68 percent, putting somewhere between 260,000–374,000 Americans to work across the country. “Solar installer” is set to be the fastest-growing job in the U.S. for the next decade. With the cost of solar dropping nearly 70 percent since 2010, the industry has made incredible strides in the effort to expand, and solar no longer seems like a niche avenue for the environmentally concerned to meet their electricity needs. But now, there are strong fears the tariff is going to put this kind of growth to a screeching halt and lead to massive layoffs across the industry. At least 23,000 jobs could be lost this year alone according to the Solar Energy Industries Association (SEIA) and tens of thousands of more later on.
The solar-panel manufacturing sector won’t be able to replace those jobs. The SEIA argues that of the 38,000 jobs in solar manufacturing in the U.S., only 2,000 are focused on actually making the cells and panels. Optimistic predictions suggest the tariff might be used to add just 6,400 jobs in solar manufacturing. “There’s no doubt this decision will hurt U.S. manufacturing, not help it,” Bill Vietas, president of RBI Solar in Cincinnati, said in an SEIA statement.
As it turns out, it’s not China undercutting U.S. companies. The White House is doing that all on its own.
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