30% Tariff on Solar Imports to the US: What is the Impact on the Industry?

Wednesday January 31, 2018

President Trump has enacted the solar tariffs associated with the Section 201 filing.  The tariffs will come into force on the 7th of February, and start at 30% on all cells and modules, falling 5% per year for four years.  The first 2.5GW of cell imports will be exempt from the tariffs, and the tariffs will remain flexible, with the President being permitted to modify the measures if domestic firms are considered to need more or less assistance going forward (PV Tech).  The US government has now also announced the countries which will be exempt from the tariffs on cells and modules.  The imports from exempted countries are restricted to 3% of annual US cSi solar imports per country, and 9% for all exempted countries combined.  There has been no announcement regarding how the tariffs will be imposed once these limits have been reached (PV Tech).  For a full list of the exempt countries, please visit PV Tech.

Opinions on the tariffs vary wildly depending on who is asked.  The Trump administration’s party line is, unsurprisingly, that the tariffs will save the American solar industry.  Specifically, they believe that the tariffs will lead to more manufacturing jobs in the US and lead to foreign solar panel producers setting up more manufacturing plants in the US, and will lead to stock increases for US producers.  In their minds, there is no risk of a trade war being sparked by these tariffs (Voa News).

Others in the market are not so sure.  The SEIA believes the tariffs will put 23,000 people out of work in the panel installation industry (Voa Newsl), while the research firm Wood Mackenzie believes the US market will shrink by 10-15% as a result of the tariffs (Voa News).  The main beneficiary, according to Voa News, will be First Solar, producer of CdTe thin film products.  In a market where cSi has been effectively stunted, CdTe technology will have an opportunity to grow and take market share (Voa News).

It’s not all bad news, however!  According to a study by PV Tech, module costs for US firms will still be lower than 2017 prices, and the 5% annual decline in tariffs should allow price adjustments, which, in turn, will allow project investments to continue (PV Tech).  In addition, Green Tech Media predicts that 2018 will only be moderately impacted in terms of reduced PV installations, as inventories have been built up in anticipation of the potential of the tariffs being enacted.  There will be a drop evident in 2019, when new purchases will need to be made.  However, the market is still expected to deploy 11.9GW in 2019, an increase of 19% compared to the forecast for 2018 (10GW).  Continuous growth is forecast through 2022 (Green Tech Media).

It is still unclear how the tariffs will impact the US and global solar industry, but it is clear from the articles being released that this will be a hot topic for some time.  As a key supplier of high purity quartz for use in CZ crucibles, tubes, and rods for the solar industry, The Quartz Corp takes a special interested in this tariff and the outcomes.  For more information on our products, please download our datasheets or contact us directly.

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