(Image credit: Dennis Jarvis at flickr under a creative commons license)
The U.S. Commerce Department preliminarily announced a huge new tariff on Chinese solar panel imports that will range from 18.56 to 35.21 percent. Their stated aim is to counteract unfair Chinese government subsidies that allow manufacturers to produce panels far below real cost and corner huge swaths of the worldwide market. The tariffs are coming, the question is…
How it’ll go down this time:
Because large projects usually operate with larger quantities and smaller margins than residential installations, the new tax is much more likely to be a deal-breaker for upcoming commercial projects than for homeowners.
A similar conflict happened in 2012, with the U.S. deciding to levy a 25 to 36 percent tax to prevent China “dumping” underpriced solar cells on the American market. Despite trade policy strife over the last two years, the U.S. Solar industry posted record growth, with residential comprising an increasing market share.
Industry groups and installers will take the classic pro-business argument (whether it holds water in this case or not): higher costs for us will translate into higher prices for the consumer. On the other side, domestic producers and those without a vested interest will applaud market equality. Only time and data will tell how the industry is affected. Even then, attribution to an exact cause (such as these tariffs) will be difficult and highly subjective.
It’ll be a month before the Department of Commerce releases its official decision, and several weeks after that until the effects are felt (if at all) in the home solar industry. Given the strength of current rebates in across many U.S. states and record-low installation prices, some percentage of already-eager consumers will want to get in before any potential price hikes.