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Guest Editorial: Solar tariffs – An uninformed policy

Posted: February 9th, 2018 | Guest Editorial, Opinion, Opinion & News | No Comments

Trump gets played by Chinese and Arab investors, sacrifices American jobs

By Daniel Sullivan

On Jan. 23, a proposal that sat on President Trump’s desk for over two months, which the renewable energy industry had been watching anxiously, was finally signed. His signature places into effect a 30 percent tariff on imported solar panels, and while it was expected, the reasoning behind it and implications going forward beckon further understanding.

What the president was likely briefed on is that the tariff would encourage competition with foreign markets, incentivize American solar manufacturing and create more jobs at home. This is not only a critical piece of Donald J. Trump’s “America First” platform, but a common sentiment felt among many Americans who have experienced manufacturing jobs moving overseas and foreign products dominating the consumer market.

It may be said that this tariff will help grow the American solar industry, but in truth, signing it into effect is a grossly political, if not uninformed, move. The original proponents of the tariff are two solar manufacturers with United States operations, not American companies: SolarWorld and Suniva. SolarWorld is a Qatari-owned company, while Suniva is majority Chinese-owned. In 2017, both companies filed for bankruptcy, claiming that foreign competition — not their own ill-advised business practices — was the culprit. They banded together to propose a tariff on imported solar panels, which they claimed would level the playing field and create more favorable conditions for American solar manufacturing.

The irony, however, is that the tariff is actually supporting foreign-owned solar companies, who happen to have plants in the United States. It was a selfish move to manipulate the political climate in hopes of nursing the wounds of lost market share, instead of making quality improvements to operate in a profitable and sustainable manner.

The second glaring issue with this tariff is it lacks a critical component that is necessary to achieve its alleged aim. Solar manufacturing in the United States is not subsidized like oil, natural gas and coal. Government subsidies helped grow and solidify these American energy giants in an extremely competitive world market. Tariffs alone would not have had that same impact in developing the Exxons and Shells of this nation.

If Trump truly wanted to increase American manufacturing, there are various ways he could have done that. In 2009, the American Recovery and Reinvestment Act was enacted to preserve and create jobs and promote economic recovery. It gave grants to manufacture goods in the United States. At the time, Kyocera Solar was manufacturing solar panels in Mexico just south of the border from San Diego, and they moved their manufacturing plant to Kearny Mesa as a result of this grant. The American Recovery and Reinvestment Act was a sincere effort to help American manufacturing, where this tariff is a play in a political game.

This tariff also appeases Trump’s fossil fuel-friendly cabinet and donors. With Energy Secretary Rick Perry, who maintains that the “science is out” on climate change, and former ExxonMobil CEO Rex Tillerson as Secretary of State, there is no doubt that this is a fossil fuel-friendly administration. What this tariff is ultimately aimed to do from a political perspective, is curb renewable energy growth and reaffirm the fossil fuel industry as the possessor of American energy, swiftly awarding new opportunities and permissions to expand extraction and trade while restricting the growth of solar.

The most blatant inconsistency is the conflict between this tariff and Trump’s America First jobs plan. The American solar industry employs more than coal and oil combined, and two-thirds of these solar jobs are outside of manufacturing. Many are employed in the installation of solar power systems, and in certain cases this supports well-paid, union labor. There is additional employment in sales, marketing, accounting, engineering as well as with local supply chains like providers of racking, inverters, batteries, roofing, software and other products used in a solar power system. These are prevailing wage, healthy jobs, that often encourage education, vocational training and community engagement. Jobs in solar have been experiencing growth in traditionally low-income, high-unemployment areas like Oakland, California, filling in the gaps where local fossil-fuel jobs have left employees unhealthy and unfulfilled.

While the move feels more like an aftershock rather than an earthquake itself, effects will be felt in solar employment from surges in pricing and subsequent lower demand. Some local solar design and installation companies who anticipated the tariff secured a stockpile of tariff-free modules and are offering those to prospective clients while supplies last.

The bottom line is that solar will persevere. While the tariff will have its effects, it will not stunt the solar industry’s inevitable growth. Southern Californians are still subjected to some of the highest costs of electricity in the nation, thanks to investor-owned San Diego Gas & Electric and its parent company, Sempra. Despite tariffs, solar remains a more affordable option than sticking with the utility and has a bright future.

— Daniel Sullivan is founder and president of Sullivan Solar Power.

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