On January 26th, 2018, President Trump decides the future of the solar industry. The US International Trade Commission recommended an astounding 35% tariff on some solar panels, and January 26th is the President's deadline to decide.
Background of the Proposed Solar Tariff
In April of 2017, Chinese-owned company Suniva filed for bankruptcy. Suniva had been founded at Georgia Tech, but subsequently purchased by Chinese solar manufacturer Shunfeng International in 2015.
After filing for bankruptcy, Suniva filed complaints with the International Trade Commission, complaining that they would not be in Chapter 11 Bankruptcy if there were tariffs on other manufacturers.
Why did Suniva file that complaint? According to Wired, SQN Capital offered Suniva a $4 million loan to do so. Then, SQN Capital sent a letter to the Chinese Chamber of Commerce offering to withdraw the complaint with the International Trade Commission in exchange for a $55 million purchase.
After Suniva filed their complaint, German-owned SolarWorld joined in support of the complaint. This after announcing that SolarWorld is insolvent and in bankruptcy.
So are Suniva and SolarWorld just trying to support US Manufacturing by pushing for tariffs on their competitors? Not very likely. “Reviving manufacturing in the U.S. may be part of their plan, but this is probably just an effort to salvage money,” said Jenny Chase, a Zurich-based analyst at Bloomberg New Energy Finance.
SolarWorld is for sale and the date of sale has been set for after the tariff decision. Bloomberg says that this may be in an effort to make the insolvent company more valuable, thereby increasing value as it is on the auction block.
What Happens Next?
There are several options on the plate of President Trump in the next couple weeks. He can:
- Reject the proposed tariffs in support of the free market economy
- Accept the tariffs lobbied by two bankrupt foreign-owned companies
- Ignore the issue completely and no tariffs will be added
How Will This Affect the Solar Industry?
No one can predict with 100% certainty what will happen, but vastly increased costs generally results in lower sales. As of 2017, there are almost 400,000 people employed in the US Solar Industry and 1 of 50 new jobs were created in the Solar Industry. Over 85% of these American jobs are in areas such as installation, sales, and even your goofy-looking bloggers.
Just look at this infographic from Forbes. The US solar industry accounts for almost HALF of American jobs in power generation.
Very few US jobs are in solar manufacturing. In fact, New Energy Finance analyst Hugh Bromley told Bloomberg “There’s an extremely low likelihood that the U.S. will ever manufacture enough equipment to meet its own domestic needs.”
Without the domestic infrastructure to meet the ever-increasing demands of the proposed tariffs will only serve to raise prices for consumers. These taxes are just passed on to consumers in the form of higher prices. If customers buy less, then some of the 400,000 US solar employees may be laid off and reducing our environmental impact as a country will become more difficult. Who would the tariff help? A bankrupt foreign-owned company trying to raise the value of their assets before a court-ordered liquidation, according to some experts.
“[W]e continue to believe that this is the wrong decision, based on Suniva and SolarWorld’s mismanagement, [...] and we will continue to lead the effort to protect the solar industry from damaging trade relief. I am determined to reach a conclusion that will protect the solar industry, our workers and the American public from what amounts to a shakedown by these two companies. An improper remedy will devastate the burgeoning American solar economy and ultimately harm America’s manufacturers." - Abigail Ross Hopper, President and CEO of the Solar Energy Industries Association.
What Benefits America?
The freedom to choose benefits Americans the most. Currently, you have the freedom to choose what solar panels you want and who you trust to install them. The solar industry is growing at an incredible rate in part because customers have had the freedom to choose how they want to power their homes. That freedom may erode when customers are hit with a huge tax in the form of this tariff.
The two companies that are pushing for these tariffs employ just a few hundred people, while there are about 40,000 people employed in US solar manufacturing and nearly 400,000 people employed in the solar industry - a number that shows a tripling of new jobs in under a decade.
Are solar rates going to skyrocket if President Trump orders this tariffs? Not exactly, according to ArsTechnica. Every time a similar tariff has been proposed, the World Trade Organization has defeated it, because countries threaten retaliation by enacting punitive tariffs on completely unrelated products.
So like the hundreds of thousands of other solar employees and the countless millions of people that care about creating clean, renewable electricity, Sunpro Solar hopes that President Trump does the right thing and allows companies to freely compete as they have for years. And we hope you make the decision to Go Solar with Sunpro while we offer our best prices and service ever.