Trumps Solar Tariff Impede Low-Costs

Tariffs are terrific for stimulating local economies when imports can be effectively traded for a comparable good or service.  In the case of Trumps solar panel tariff, we have run into a potential pricing issue.  There are some relief systems in place helping to offset rising prices, but let's see what else there is to be said in the world of solar panel pricing.        

We’ve continued to receive lots of inquiries about the new solar tariff from customers at HahaSmart. The unfortunate part of this new tariff is that this tariff will raise the cost of a standard home solar installation by $500 to $1,000. The good news is that you can still save money if you are smart, here at HahaSmart can save you between $1,500 and $3,000. For retail shoppers, the savings could be indeed higher.

Trump’s Solar Tariff

On January 22nd, 2018, the Trump Administration imposed a 30% tariff on solar imports from outside the United States. The tariff includes both imported solar cells, a fundamental input to constructing solar panels, and solar modules, otherwise identified as solar panels. According to a performance sheet issued by the U.S. Trade Representative, this tariff will continue for four years and will decrease by 5% annually, descending to a 15% tariff in 2021.

Free trade is the way to keep these prices down, and we are strongly opposed to any trade limitation. We also expect this action to have a limited impact on the number of home solar installations in the United States. The majority of the effect of the tariff is supposed to be felt by utility-scale developers. This expectation was confirmed by a June report issued by Reuters that revealed U.S. businesses have eliminated or stopped $2.5 billion in large PV installation projects due to the tariffs of solar panels. 

American Solar Buyers And Tariffs

A tariff is merely a tax on imports or exports, in this case, imports. There are two kinds of tariffs, those which are determined as a fixed rate on the thing and those that are measured as a fixed dollar expense.

Trump’s tariff requires a 30% tax on carried panels in year 1, which is favored to a fixed dollar amount if you’re considering about going solar. Because the tariff is percentage-based, its real impact on costs will contract each year as the price of imported solar panels resumes to drop.

Due to progress in solar manufacturing, the price of solar panels has decreased by between 2% and 6% per year for the prior several years. In China, South Korea, and other countries that control solar panel construction, lowering costs and technological progress won’t reduce down solely because there is a U.S. tariff – and in particular, the tariff may provide them a reason to reduce costs quicker.

The summative result is that the percentage-based tariff, which is now set to drop each year, will also be diminutive because it will be implemented to ever-decreasing module prices. An instance of this trend is represented below, where the dollar amounts shown are in dollars per watt of solar power.

It's still a great time to buy solar panels, so don't hesitate to contact us.  

If you want to find out what solar panels are right for you, go to HahaSmart.com and try our price checker tool. You can see how much you can save over the next 20 years by going solar, and we can help find local solar installers who can help.

For more information relating to going solar, don't forget to visit our solar blog section for more handy guides and articles.