Possible Setback for Solar

Yesterday, January 22, 2018, President Trump announced the imposition of tariffs on imported solar panel components (solar cells and solar modules). The tariffs will be in place for four years, will start at 30 percent in the first year (2018), and will gradually decline by 5 percent each year to a 15 percent tariff in year four. The first 2.5 gigawatts of imported solar cells will be exempt from the tariffs each year.

President Trump’s decision follows from the U.S. International Trade Commission (“ITC”) finding in September 2017 in connection with a trade case filed by two U.S.-based solar manufacturing companies that solar panel imports were harming domestic businesses operating in the solar industry. The tariffs imposed by President Trump are lower than the ITC’s recommendation to the President of 35 percent tariffs and much lower than the tariffs the two companies that filed the trade case with the ITC requested.

The President’s announcement was met with mixed reaction from the solar industry. According to the Solar Energy Industries Association (“SEIA”), the solar industry’s leading trade association, the President’s decision will effectively result in the loss of roughly 23,000 U.S. jobs in 2018, including many in manufacturing, and will result in the delay or cancellation of billions of dollars in solar investments. On the other hand, in a statement praising the President’s announcement, the CEO and President of SolarWorld Americas Inc., Juergen Stein, commented that “SolarWorld Americas appreciates the hard work of President Trump, the U.S. Trade Representative, and this administration in reaching today’s decision, and the President’s recognition of the importance of solar manufacturing to America’s economic and national security. We are still reviewing these remedies, and are hopeful they will be enough to address the import surge and to rebuild solar manufacturing in the United States.”

Additional details on the President’s decision can be viewed here. For more information about the President’s decision or other questions regarding the solar industry, contact the author of this alert, Rodrigo Figueroa at rfigueroa@dykema.com.