An Emerging Industry Faces Uncertain Hurdles
President Trump recently approved recommendations by the International Trade Commission (ITC) to impose steep tariffs on silicon-based solar panels. With 95 percent of solar panels in U.S. solar projects currently imported from Southeast Asia, the tariffs pose future uncertainties to the industry. Proponents of Domestic Solar had sought a less restrictive licensing fee arrangement, only to see their efforts fall short. The tariffs will start at 30 percent next year and gradually decline to 15 percent over four more years.
One risk of tariffs is they make solar power a less competitive source of clean energy. Adoption of technology is key for solar to effectively compete with wind and natural gas. One fear is the tariffs could lead to a reduction in investment within the industry. Solar jobs grew as clean energy sources became a more financially realistic investment strategy. The tariffs also impose a clear threat on the ability of many firms to remain competitive within the solar industry.
The effects of the tariffs are incredibly damaging. The Solar Energy Industries Association predicts a loss of 23,000 jobs in the industry in 2018. Furthermore, this does not even take into account the potential billions in lost or delayed investment. Tariffs should protect American jobs, but on balance they damage them instead.
The greatest effect of these tariffs is not on solar manufacturing jobs in the United States. Of the 38,000 solar manufacturing positions only 2,000 are actually creating modules and solar cells. The base of employment in the solar industry create, install, and monitor the projects. They comprise 222,000 workers and perform arduous tasks that cannot be exported or automated. These positions are where the 23,000 jobs in solar could potentially be lost.
For the most part the effect of the tariffs on consumers won’t be very impactful; experts anticipate prices will raise to roughly where they were two years ago. Due to competitiveness in solar there has been a continued reduction in system costs in recent years. Nowadays solar cells and modules represent only a fractional cost of the projects typically, so the trend is still looking positive for consumers.
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