On Jan. 22, President Trump imposed tariffs of 30 percent on imported silicon-based solar panel technology, including both solar panels and solar cells originating from anywhere outside the U.S.
As a leader in the solar industry for more than a decade, I cringed when I read the sparse details released about the tariff — not because the tariffs were high, but because I understood quickly that the tariff made no sense.
Furthermore, I knew the media would get it all wrong and the distraction to the market would cause as much harm as the tariffs themselves.
As expected, media outlets across the country immediately reported en masse that Trump’s highly publicized move was more politics than policy, and more aggressive posturing than actual protection for the U.S. Solar manufacturers they were supposed to defend.
It might be easy to see Trump’s announcement as an antagonistic first move in the pending trade war with China, the largest importer or solar cells and modules.
Or view is this as an example of how Trump continues to back the fossil fuel industry and large corporate utilities against the upstart U.S. Solar industry that has grown to almost 2 percent of total U.S. electricity generation (~15 percent in California) while employing more Americans than the coal, oil and natural gas industries combined.
Yes, it would be easy to say Trump hates China, hates the environment, hates solar, and most especially, hates those of us living in the bubble (or living in the future, whichever you prefer).
But as an environmentalist with degrees in economics, a resident of uberliberal Fairfax and as a partner and CEO of the largest solar provider in the North Bay, it’s not that simple.
Tariffs imposed by the Obama administration twice targeted Chinese solar manufacturers but did little to save the two foreign-owned companies (Suniva and SolarWorld) that filed suit with the U.S. International Trade Commission that led to the new tariffs.
And Trump imposed tariffs at a lower rate than recommended by the Trade Commission. So he frustrated many in his base and the renewable energy industries, environmental groups, free-market advocates, conservative and liberal activists, and politicians from both sides of the aisle.
What he did do is impose an ill-conceived tariff that will hurt U.S solar manufacturers and U.S. trade partners worst of all — since their products are generally higher efficiency, higher quality, and higher priced, and so affect a larger net penalty via the 30 percent tariff.
And it could get worse. China could retaliate by placing its own tariffs on the huge quantities of solar-grade silicon, robotics, and balance of materials exported by U.S. companies to Asia to make the cells and panels they send back to us.
Meanwhile, low cost Chinese solar manufacturers, falsely assumed to be the target of Trump’s aggressive trade policy action, would actually incur the least tariff penalties - and could enjoy a larger price differential in the post-tariff environment relative to all products.
But worst of all, the solar import tariffs have already created uncertainty in an industry where, especially in the North Bay, there should be no uncertainty.
Tariffs or no tariffs, powering your home or business with solar costs less than fossil-fuel based power provided by utilities, typically 40 percent–70 percent less than PG&E on purely economic grounds. Tariffs or no tariffs, solar is the only source of electricity generation that does not consume or pollute massive amounts of water, nor does it emit toxic pollutants into our air.
Ted Walsh is CEO and a partner in SolarCraft in Novato. He has lead several local solar companies while developing more than 100 commercial projects and several hundred residential solar projects within his community.