Trump tariffs, a US solar booster or a showstopper

On January 22nd, 2018, President Donald Trump has announced new tariffs on importing solar panels and the imported washing machines used in solar application. The tariff on panels is announced to be 30% in the first year to come and would decline down to 15% in 4 years. The new law also allows import of 2.5 gigawatts tariff-free unassembled cells each year. The White House expressed an alarm on an triple expansion of solar power generation in US due to “spurred on by artificially low-priced solar cells and modules from China”.

From 2012 to 2016, the volume of solar generation capacity installed annually in the United States more than tripled, spurred on by artificially low-priced solar cells and modules from China [1].

While other places in the world, this artificially low-priced solar cells and tripping of clean energy production would be a great news, but it seems US think-tankers believe otherwise. Such taxes definitely in the short run would give US producers, who were demanding a 50% tariff, a boost. This would also make big fishes to open their US factories to avoid the tariff [2] [3]. These are all great news and according to the expectations of White House to keep away Chinese and Korean rivals out of the market.

However there is another side of the coin to this. According to renewable energy experts this could lead to a possible slower growth of the clean energy market in US that could put the 23,000 American jobs in this industry at risk [4] [5]. This could also result in a lazy industry both in terms of creativity and innovation, whose higher hand is only local production and not the higher technology and better production routines, the history has proved. US serious producers would still have to produce their high volume production for competing in the global market outside of US borders and would have small effects on the overall economy. The recent survey done by the nonpartisan organization Voice of the People, also shows that 6 out of 10 Americans oppose these tariffs, while Republicans voters favored it by 60% [6].

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United States is currently the second biggest market of solar applications after China based on IEA report [7]. Other countries are vastly investing in this sector and the size of installed solar PVs is estimated to be over 100 gigawatts until 2022 [7,4].

Sources: [1] [2] [3] [4] [5] [6] [7]