This week the Trump administration slapped a 30% tariff on solar panels imported to the United States. This solar tax makes clean energy more expensive and could reverse the strong trend of booming solar jobs in America. What is behind Trump’s solar tax?
At first blush, this decision seems like fossil fuel interests exerting power. The coal industry is upset because clean energy is outcompeting them on price and quality. This economic reality is why they sought a bailout from the Federal Energy Regulatory Commission. And this economic reality is why FERC rejected the coal bailout.
But as I read the trade press and look into the issue more, it’s not as nefarious as it seems. This is really a debate about manufacturing jobs versus affordable products. It was American-based solar panel manufacturers, and washing machine maker Whirlpool, who sought these tariffs. These companies are just trying to raise the price of foreign-built products so the American-built products can compete on price. Creating local jobs is not a bad thing.
The vast majority of solar jobs in America are from installing solar systems on homes, business and utilities. A Department of Energy report calculates that in 2015, 373,000 Americans worked in the solar sector-which is more than double coal jobs and only slightly lower than natural gas jobs-and 70% of solar jobs come from installing the systems. And that’s great.
The trouble with the new tariff is that all those installation projects and jobs depend on inexpensive imported panels, and as the cost of the panels goes up so will the cost of projects. Raising the price by imposing taxes on solar panels, means fewer solar projects, fewer American jobs and dirtier air. Everyone loses by taxing solar.
A better solution for clean energy and American jobs is to invest in our own educational system and manufacturing base, rather than tax imports. That’s why as ICL encourages coal plant closures, we also encourage reinvesting to create renewable energy jobs in the affected communities.