Solar import tariff: pain without benefit
The 30 percent import tariff just imposed on imported solar panels and solar cells is a protective tariff without benefit.
It will not revive the declining U.S. silicon solar cell industry. It will harm U.S. workers in factories manufacturing solar panels using imported solar cells. It will hurt the rapidly expanding U.S. solar industry, slowing down the rapidly growing adoption of solar across the U.S. economy and costing jobs. It will slow the reduction of greenhouse gases and the replacement of coal and natural gas plants with cheaper, zero pollution energy.
In Jacksonville, Fla., the city council recently voted for a $23 million subsidy for Chinese company Jinko Solar to build an 800-worker modular production plant which itself will be subject to the tariff on solar cells. Similarly, the tariff will affect the Tesla giga-factory in Buffalo that uses imported cells.
The tariff will slow, but not stop, the expansion of U.S. solar. According to Green Tech Media there will be an 11 percent net reduction of solar installations over the next five years. This means the installation of 61.3 gigawatts instead of a projected 68.9 gigawatts, a 7.6 gigawatt shortfall. That’s the bad news.
The good news is that solar is now big and rapidly growing. That 61.3 megawatts of new solar is equal to the capacity of 61 1,000-megawatt nuclear plants. Total U.S. nuclear capacity is 99 gigawatts and declining as nuke plants shut down, unable to compete while solar rises.
What does this all mean on the ground for solar installations? A 30 percent module tariff means about a 10-cent-per-watt increase in solar costs. In 2017, average residential solar cost, according to the National Resource Energy Laboratory, was $2.80 a watt installed.
For utility scale solar, huge installations above 10 megawatts or 10,000 kilowatts, the price in 2017 was $1.11/watt.
Solar in recent years has been characterized by plunging costs, improved efficiency and technological innovation. Globally, wind and solar are now competitive in more than 30 countries without subsidies and represent “an outright compelling investment opportunity with long-term, stable, inflation-protected returns,” according to Michael Drexler, head of the World Economic Forum.
Current responses to utility-scale RFPs for solar have been an astounding less than 2 cents per kilowatt-hour. This is stunning for a zero-fuel, zero-pollution, low-maintenance-cost energy fuel. Fossil fuels and nukes simply won’t be able to compete.
In addition, there is ongoing technical innovation in all areas of renewable energy and energy efficiency, as well as new applications of renewables. It is likely, for example, that new types of solar cells will replace silicon as material of choice such as using perovskite crystals, and further advances in thin film technology.
Giant offshore wind machines can now float and be anchored to the sea floor in deeper water, expanding the available offshore wind resource. A legion of new innovative renewable projects are moving forward. I am working on a pilot installation for a new Swiss design for a megawatt scale vertical axis wind turbine that is quiet, minimizes or eliminates bat and bird kills, minimizes rotor shade and has a small footprint.
The market consequences of the tariff may also lead to price reductions by Chinese suppliers and help accelerate the reduction in cost by racking companies, inverter manufacturers and in PV installation techniques.
Tariff or not, now’s the time for us all to embrace the economic, ecological and social benefits of building a secure, prosperous, efficient, renewable energy future.
Roy Morrison’s latest book is “Sustainability Sutra.”