Pros and Cons of President Trump's New Solar Tariff
- Feb 26, 2018 4:00 pm GMT
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With energy conservation being at the forefront of our future, the specifics of President Trump's new solar equipment tariff are of particular interest to those affected both home and abroad, for different reasons. The value of solar energy cannot be understated for its advantageous relationship with utility management, however acquiring the necessary panels is not as simple as we would like. Roughly 80 percent of the pieces used to construct solar panels are imported from other countries, with Asian territories especially contributing to their makeup.
Taxing imported goods is nothing new to our economy, however President Trump's new 4 year equipment tariff has been met with opposing viewpoints. The tariff places a tax on the imported parts that begins at 30% and declines at a gradual rate to 15%. Proponents of the tariff are resolute in their belief that it will raise the percentage of solar manufacturing done in America and positively effect our economy accordingly. Conversely, some warn that it could actually hurt workers and companies on our own soil, delivering the opposite intended outcome.
Why Was The Tariff Implemented?
Those skeptical of President Trump's motivations cite that his administration has never been ardent supporters of renewable energy, pointing directly to his tax reform bill as proof. Solar and wind companies in the bill have been hampered financially, leading credence to those who say he wants to roll back laws regarding power plant emission. Pulling the United States out of the Paris Agreement also did not demonstrate a conviction to the cause, though others say the reasons are far more complicated.
For what it's worth, President Trump's camp maintains the tariff is consistent with his stance on being strict with China. Because China constructs so many solar cells, the logic makes sense in Trump's vocal endgame of wanting to protect American manufacturers in the long run. In theory, the tariff increasing cost of solar parts obtained from foreign countries should cause a spike in American solar companies buying locally within the United States. This of course could make solar manufacturing boom in our home land.
Reaction Remains Divided On Trump's Tariff
There are two schools of thought on the recent inclusion of the solar panel tax under Trump: Parts manufacturers based in the United States steadfastly believe it will help their bottom line with their direct competition being bogged down by higher prices. On the other side of the coin, American solar companies that bring in their parts from foreign distributors have the very real worry of rampant job loss for up to 23,000 people, according to The Solar Energy Industries Association. Additionally, these companies are concerned that their own costs will in fact go up, and that job gains will never be able to offset the ones lost since so much of production is automated. "Rolling Stone" opines that this surge in cost will make the United States even more reliant on coal, which introduces a myriad of other problems.
Those 'in the know' in the industry also predict a 3-10% increase in the cost of solar panels themselves, which will slow things to a crawl until businesses can adjust to the jump in prices accordingly.
What Does Solar's Future Hold?
Despite peeling back the onion on the pros and cons of Trump's new equipment tariff, few argue that solar will not be our model of efficiency going forward. The hope is that with experience in dealing with the tax, companies will learn to adapt to the ever-changing business of parts acquisition and production. Ultimately, gossip is nothing more than speculation, and only with time will the tariff's true impact be seen as it molds the innovation of home energy saving.