If you’re considering solar, you might be wondering how the recently mandated solar tariffs could affect the price of solar. Will it nudge the needle in a negligible uptick, or skyrocket prices beyond your reach?
Here’s a fact sheet to break down the proceedings and how it could affect solar prices.
A Timeline of the U.S. Solar Tariffs and Solar Trade War
- Between 2005 and 2012, China’s contribution to global solar cell manufacture increased from 7 percent to 60 percent. Inexpensive imported solar panels spurred U.S. solar installation to more than triple between 2012 and 2016.
- In April 2017, Suniva requested a 40 percent tariff on solar module imports. SolarWorld joined the petition in May 2017. This was meant to offset their disadvantage against foreign module manufacturers. They claimed these foreign imports were underselling them and crippling their own manufacturing facilities.
- However, other U.S.-based solar manufacturers thrived despite the foreign competition. There is speculation as to whether Suniva and SolarWorld’s lack of success was due to internal issues.
- In October 2017, the ITC recommended a slightly lower 30 percent tariff.
- On January 22, 2018, the 30 percent tariff was approved by President Trump. The solar tariffs will decrease by 5 percent over the next four years, until they expire.
Here’s the schedule of the tariff decrease from the U.S. Trade Representative (USTR) fact sheet.
What the New Solar Tariffs Mean for the Price of Solar
- While the tariffs may help some solar panel manufacturers, it could hurt many other parts of the industry, such as mounting manufacturers and installers. This could result in significant job losses (currently estimated at 23,000) in the solar industry and slow installation rates.
- Some good news is that the tariffs aren’t as severe or as long-lasting as initially proposed. Though 30 percent is significant, it won’t set the solar industry back irreparably.
- Green Tech Media projects the solar panel tariffs will increase costs by 10 to 12 cents per watt. These numbers are based on the current U.S. import prices of 30 to 45 cents per watt.
- Since the solar tariffs are percentage-based, the costs will reduce to 4 cents per watt by year four.
- The tariffs will likely increase the cost of residential rooftop systems by just 3 percent. Importantly, the tariff only applies to the solar equipment, and not other costs associated with a residential installation.
- Only one-third or less of rooftop solar system costs are from solar cells and modules. Prices for other solar components continue to fall and could help offset the slight increase from modules.
Solar Tariffs and Your Solar Project
- The average cost for a home solar system through Pick My Solar is around $3.30 per watt. With the addition of the solar tariffs, homeowners are looking at an additional 6 percent, around $3.51 per watt.
- While it might be disheartening to see any increase in cost, the benefits of capturing your own electricity still outweighs this.
- As long as you’re depending on utility companies’ increasing costs, you’re paying more every month. This becomes more true every year as energy costs rise, especially in sunny states like California.
- Regardless of solar tariffs causing a potential slight uptick in prices for modules, homeowners will still save money with a rooftop solar system in the long run.
Here's what solar prices look like before and after the solar tariff, for an example 7kW system:
Tools Like Pick My Solar Mitigate Solar Tariff Costs
When you use a platform like Pick my Solar, you receive several quotes from vetted solar companies. This gives you the knowledge to make a powerful choice and be sure you’re not paying more than necessary. Find out more about how to get the best price for what you need and reduce any percentage difference – new or old.