Trump’s solar panel tariff will affect but not kill the energy source, some say

The decision by the Trump administration to slap a 30 percent tariff on imported solar energy panels has some people worried it will bring cloudy skies for the nation’s push toward renewable energy.

Others aren’t as worried, arguing that solar energy has already firmly established itself.

“Even with the tariffs, solar is now the cheapest way in the world to produce electricity,” said Keith Graepler, president of SunSource Homes Inc. on Southwest Boulevard. “It’s not going to make a difference. That train has left the station.”

The administration announced the tariff this week, saying it is meant to protect domestic manufacturers from cheap imports, largely from China.

The tariff exempts the first 2.5 gigawatts of imported solar cells. After four years, the 30 percent tariff drops to 15 percent. The U.S. International Trade Commission in October had recommended a 35 percent tariff.

Some fear the tariff is potentially crippling and is a setback for the nation’s attempt to increase reliance on renewable energy sources.

Time magazine said the tariff is “the biggest blow” that coal-loving President Donald Trump has inflicted yet on renewable energy industries. Previously the president has pulled the U.S. out of the Paris energy accord designed to curb climate change. His Environmental Protection Agency also has rolled back power-plant emission regulations, reducing the cost of burning fossil fuels.

“Government tariffs will increase the cost of solar and depress demand,” RBI Solar President Bill Vietas warned The Guardian, “which will reduce the orders we’re getting and cost manufacturing workers their jobs.”

Solar power in the U.S. is a growing, $28 billion industry that employes 260,000 people, according to the Solar Energy Industries Association, which opposed and lobbied against the tariff.

“The decision effectively will cause the loss of roughly 23,000 American jobs this year,” the trade group warned, “including many in manufacturing, and it will result in the delay or cancellation of billions of dollars in solar investments.”

But not at Cromwell Solar in Lawrence.

“We’re right now in the process of hiring 20 people,” said CEO Aron Cromwell, adding that none of his customers or clients have called to cancel a project because of the tariff.

Cromwell and others say the costs of solar energy already have dropped so dramatically over the last decade that the industry can survive, especially because electric rates from nonrenewable sources continue to rise.

The solar panels themselves constitute about 20 percent of the cost of converting a home or business to solar energy. And solar panel costs continue to fall as efficiencies increase.

So the net result of the 30 percent tariff, said Graepler, is that solar costs will increase only modestly and not enough to deter homeowners or businesses from investing in a solar conversion. Instead of taking eight years for a solar installation to pay for itself, it may take eight years and a few months.

“The same person who yesterday wanted to go solar will still want to go solar tomorrow” after the tariff, Cromwell agreed.

The tariff is more likely, however, to make a difference for utilities that produce power because investments on that scale are much bigger. That will affect blue collar jobs that otherwise would have been created.

“You’re going to see over the next 24 months a massive reduction in utility-scale solar projects,” Graepler predicted, “then they’re going to pick right back up again.”

This story was originally published January 24, 2018 at 1:38 PM with the headline "Trump’s solar panel tariff will affect but not kill the energy source, some say."