Solar, in spite of the tariff, will continue to thrive and disrupt

A message from Kathy Swartz, Solar Energy International Executive Director

Dear Friends and Alumni of SEI,

On Monday, January 22, the Trump Administration made a deciding call on the anticipated solar trade case, announcing a 30 percent tariff on imported solar cells and modules, to taper off by five percent over four years. While we are disappointed in this decision, this is not doom and gloom. Solar Energy will continue to thrive because of public support, the relatively small increase that this tariff will actually cost,  the resilience of solar companies who have succeeded in spite of policy, and a rapidly growing international market. The disruptive “solar cat” is out of the bag and at this point, there’s no putting it back in!

Solar has tremendous public support. Public support of solar is at at an all-time high. According to the Pew Research Center, in 2016, “just 4% of Americans report having home solar panels but many more − 37% − say they are giving it serious thought” and 89% of Americans favor solar farms.  

Consumers are motivated more than ever, whether it be because of the strong economic benefit of installing PV, or the new technology that is  changing the market, or the desire to be energy independent especially due to natural disasters, such as hurricanes and wildfires, that can wipe out the grid for many months, as we’ve seen in Puerto Rico. Tariff or not, public support for solar will only continue to increase. As a consumer, if you don’t like this tariff, then send a clear message by contacting your local solar installer and go solar.

The tariff only applies to a small percentage of the total system cost. The cost to install solar has dropped over 70% since 2010!  The tariff only applies to modules (and only certain modules at that) and not the entire cost of the PV system. Essentially the tariff increases the cost of modules to where it was about two years ago, which were exceptional years in terms of amount of solar installed. Though the profit margins will be a little less for developers and installation companies, there are margins nonetheless.

According to the Office of Energy Efficiency and Renewable Energy, “the soft costs of solar account for as much as 64% of the total cost of a new solar system. These barriers are often the result of a lack of information needed to do a job or make a decision.” What does this mean? Training is more important than ever because it creates employees who have the skills and knowledge to do the job right, which reduces soft costs and more than compensates for the price increase due to the tariff on modules .

US solar companies are resilient. With over 60,000 alumni, we know so many solar companies, and these companies, many of them small to mid-sized, have figured out ways to thrive in spite of a changing energy landscape. This includes the roller coaster of incentives including last year’s uncertainty about the Investment Tax Credit, utilities trying to change policies, two previous trade cases, and increased competition. And in spite of all of this, the solar market continues to grow.

There’s a rapidly growing international market. The tariff may glut the international market with modules, which in turn will lower the already historic low price of modules, and will drive more development. For example, one of our international partners was just notified by their Chinese supplier that the price of modules will reduce by 10% as a result of the tariff. This creates even more opportunities for electrifying rural communities, stabilizing grids, and powering homes, bringing us one step closer to a world powered by renewable energy.

As an industry-leading, educational non-profit, Solar Energy International supports solar jobs through industry recognized technical training to build a thriving solar industry to achieve our organizational vision of a world powered by renewable energy. As Tesla’s Elon Musk said, “I could either watch it happen or be part of it.” You, our friends and alumni, have chosen to be part of this,  and regardless of the tariff, our industry will continue to disrupt how we get our energy by producing reliable, cost-effective, clean electricity. And there’s no stopping us now!

Onward, upward,

Kathryn Swartz, Executive Director

 

PS: If I may, I’d like to get personal for a moment. I grew up in a small town in Northwest Ohio. It was home of many factories, including American Standard. My dad worked there and we had a good middle-class life. My siblings and I put ourselves through college by working there in the summer, inspecting toilet tanks. The factory was relocated as a result of trade agreements, and with it went good-paying jobs, because of the promise of more profit for shareholders. I understand the desire to bring back American manufacturing jobs, however, there were so many other ways to encourage all manufacturing in the United States other than creating obstacles for industries that are providing good jobs that can’t be outsourced. As a country, we can do better.

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