Project Finance Blog

Trump Administration announces tariffs on imported solar cells and modules

Posted by Brad Warner

January 25, 2018

Posted in Blog article

The Trump administration unveiled four-years of tariffs on imported crystalline-silicon solar PV cells and modules, announcing a 30 percent tariff for the first year. The tariff will step-down 5 percent each year and the first 2,500 megawatts imported each year are exempt from the tariff.  

The administration’s decision on Monday follows the U.S. International Trade Commission’s (ITC) recent remedies recommendation on imported solar cells and modules. The ITC had previously found “substantial injury” to the domestic solar cell and panel manufacturing resulting from foreign imports. In its remedies decision, the ITC commissioners were divided, releasing three different remedies proposals to President Trump.

The fact sheet released by US Trade Representative Robert Lighthizer (USTR) found that China’s share of global production has “skyrocketed” since 2012 due largely to state-directed initiatives. The fact sheet further states that, by 2017, the US solar industry had “largely disappeared.” The announced tariff is expected to apply to imports from all countries (with the exception of Generalized System of Preferences beneficiary countries, excluding Thailand and the Philippines); however, a statement from the USTR indicated that he will engage in further discussions, potentially leading to exclusions for additional countries from the tariff. 

The administration’s announced tariff is somewhat less burdensome than the 35 percent tariff proposed by the Chairman of the ITC and less extreme than Suniva’s original request for a price floor as part of its Section 201 petition to the ITC. Nevertheless, the tariffs are expected to have an impact on the solar industry. Solar Energy Industries Association said in a statement that the tariff will cause the loss of 23,000 US jobs and will affect billions of dollars in solar investments. According to a report by Raymond James & Associates, all-in system costs are expected to increase by 10 percent for utility-scale projects and 3 percent for residential rooftops. According to GTM Research, the US will see a net reduction of about 11 percent in new solar installations.

The overall impact of the tariff on the solar industry remains to be seen. For additional discussion on the effects of the announced tariff, please see here and here


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