Impact of Solar Tariffs on Solar Energy Growth in the US

New Solar Panel Tariff

This year, the US introduced new tariffs on a wide range of global imports. This includes a 30% tariff on solar imports, including both solar panels and solar cells (which are necessary for the manufacturing of solar panels). The duty will be implemented for 5 years and will decrease to 15% by 2021. Seeing as solar energy is one of the leading and fastest growing sources of renewable energy production in the US (which accounts for 18% of total power usage in the United States), many questions arise regarding how the new tariff will affect this important and growing clean energy market.

Impact on Solar Energy Prices and Growth

The new tariff, which went into effect on February 7, 2018, will likely increase home installation prices of solar panels by $500-$1000 for the typical household.  Due to the increased costs of obtaining both solar panels and the technology necessary to create solar panels, the amount of solar installations in the US is expected to decrease by 11% by 2022; some experts in the industry predict that installations will decrease by more than 25%. This major hit to a growing industry could result in a decrease in American jobs; layoffs at solar panel manufacturing plants are expected.

Still a Bright Future for Solar Panels

Although the spike in the price of solar panel installments and the possibility of job layoffs is daunting, the future of the solar energy industry is not doomed. The cost of solar installations has been declining for years, and the tariff will be entirely removed within four years.  The installation projects that have already begun will continue to be worked on. Many utility-scale solar developers are reporting no major changes in production, which is a good sign that fears of a halt in production due to the tariff are likely in vain. Therefore, this can be seen as a bump in the road for the expansion of solar technology, and not a crippling end to an important and innovative industry.