Trump’s 30% Solar Tariff Likely to Boost Prices, Slow Growth in U.S. Market

Tom Johnson | January 24, 2018 | Energy & Environment
New Jersey may do better than many states since local industry more focused on installation than manufacture

solar array aerial view
The state’s thriving solar sector is facing an uptick in costs thanks to the Trump administration’s decision to impose tariffs on imported solar panels, a step that could lead to job loss in the industry.

The decision Monday by President Donald Trump to levy a 30 percent initial tariff on imported solar cells and panels could boost prices and blunt growth in the sector, particularly for utility-scale solar projects, according to industry executives.

In New Jersey, where the solar industry has gone through boom-and-bust cycles, the impact of the new tariffs, which drop to 15 percent in four years, is likely to be less harmful because of the state’s strong commitment to growing its reliance on solar, experts said.

“It could have been worse,’’ said Lyle Rawlings, founder and president of Advanced Solar Products in Flemington. “The damage, to some extent, already has been done. The prices rose in anticipation of the tariff.’’

Still, industry observers said uncertainty about the administration’s final decision on tariffs already is causing employment to drop in some segments of the sector.

Shedding jobs

“Tens of thousands of jobs in the solar sector could be stamped out, and it could hurt momentum at a time when we need to massively ramp up clean energy to reduce carbon emissions,’’ said John Rogers, senior energy analyst at the Union of Concerned Scientists.

The Solar Energy Industries Association projects that as many as 23,000 workers across the country will lose their jobs as a result of the tariffs. “It’s not the right move for the U.S. economy,’’ said Abigail Ross Hopper, president and CEO of the association.

New Jersey is looking to expand its reliance on solar, too, but a bill to increase its mandates to tap into solar power in a bigger way was pocket vetoed by former Gov. Chris Christie earlier this month. The bill is expected to emerge early next month and get a better reception from the new administration under Gov. Phil Murphy.

The New Jersey solar sector

Approximately 6,000 people are employed in the sector in New Jersey, most of them installing solar systems on houses, businesses, and solar farms. In contrast, there are far fewer people working in the manufacturing sector, said Fred DeSanti, a lobbyist who represents solar firms.

“You’re losing many more people on the installing side to protect a lot fewer people on the manufacturing side,’’ DeSanti said. “What kind of protectionist policy is that? It’s not helpful — not helpful at all.’’

Assemblyman John McKeon, a Democrat from Essex County, agreed. “In reality, it will have irreparable effects on the U.S. economy and deal a devastating blow to the renewable energy industry,’’ McKeon said.

New Jersey’s solar industry, while booming, could be headed for a fall. By this May, it will have achieved all of the mandates to build out solar according to a state law, an achievement that could dry up investment in the sector.

Without new mandates, the price of solar credits owners of solar systems earn for the electricity they produce would drop dramatically, according to solar executives. The bill vetoed by Christie aimed to fix that problem by accelerating solar mandates.