Trump Administration’s ‘safeguard’ tariff set to damage US solar sector

President Donald Trump has moved to safeguard domestic solar manufacturers by placing a 30% tariff on imported solar modules, however critics believe that it will inadvertently stifle manufacturers that are unable to scale-up to cope with demand.

The White House approved the 30% “safeguard” levy on imported solar cells and modules following the recommendations from US trade representative Robert Lighthizer, who claimed that increased imports from areas such as China are creating “substantial” and “serious” damge to domestic manufacturers.

“These cases were filed by American businesses and thoroughly litigated at the International Trade Commission over a period of several months,” Lighthizer said. “The President’s action makes clear again that the Trump Administration will always defend American workers, farmers, ranchers, and businesses in this regard.”

China’s dominance in the solar production market has accelerated in recent years, rising from a 7% share in 2005 to more than a 60% share for cells and 71% for solar modules, according to the USTR fact sheet.

The original tariff puts a 30% levy on imported cells and modules that arrive into the US during the first 12 months of the ruling. The tariff then falls to 25% a year later, 20% the following year, before capping at 15% in the fourth year. However, the first 2.5GW of imported solar production will be exempt from the levy, which is only applicable for silicon products.

Damaging consequences

Despite the Trump Administration’s claims that the move will safeguard domestic production, industry experts believe that the move will actually damage indigenous manufacturing prospects.

The US solar sector supports more than 250,000 jobs but relies on the low-cost product imports as most job roles cover installation. Critics have warned that the levies will stifle investment in US solar projects, while US manufacturers will be unable to scale up to meet any new demand.

The Solar Energy Industries Association’s (SEIA) president Abigail Ross Hopper commented: “While tariffs in this case will not create adequate cell or module manufacturing to meet US demand, or keep foreign-owned Suniva and SolarWorld afloat, they will create a crisis in a part of our economy that has been thriving, which will ultimately cost tens of thousands of hard-working, blue-collar Americans their jobs.”

The amount of solar power added worldwide soared by some 50% in recent years because of a sun rush in the US and China, with both countries almost doubling the amount of solar they added in 2015.

In fact, solar was the fastest-growing source of new energy worldwide in 2016, outstripping the growth in all other forms of power generation for the first time. New solar capacity even overtook the net growth in coal.

Matt Mace

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