The Trump administration said Monday that it plans to impose tariffs on imported solar power technology, in what could be its most direct attack on renewable energy so far, according to Time Magazine.
Tariff rates could go as high as 30 percent for solar equipment, which could represent a fatal blow to an industry that imports 80 percent of its equipment. Already, in anticipation of the implantation of tariffs, solar projects have stalled and some developers have begun hoarding panels. The solar power industry is worth 28 billion dollars, and is now projected to lose tens of thousands of its 260,000 employees.
The move follows several other Trump administration decisions that have come at the expense of renewable energy development, including the withdrawal from the Paris climate agreement, reversing Obama-era measures to cut emissions from the power sector, and a tax plan that limited financing for solar and wind power.
But the new move may be the toughest challenge yet for the renewable energy sector to weather.
According to Hugh Bromley, an analyst with Bloomberg New Energy Finance:
“Developers may have to walk away from their projects. Some rooftop solar companies may have to pull out” of certain areas.
Domestic solar panels, however, stand to benefit from the decision. Arizona-based solar panel producer First Solar Inc. saw its shares rise 9 percent, reaching $72.20. The US International Trade Commission recommended even higher tariffs of 35 percent in October, as a way to help the domestic market compete with cheap imports.
The move also fits into Trump’s campaign promise to take a tougher approach to China on trade issues. The country is the world’s leading manufacturer of solar panels. Similar moves are also under consideration with steel, consumer electronics, and washing machines.
According to trade policy expert Clark Packard, “It’s the first opportunity the president has had to impose tariffs or any sort of trade restriction. He’s kind of pining for an opportunity.”
However, the Trump administration may not have the final word on the subject. Other countries, such as China, could challenge the tariffs at the World Trade Organization, which has a history of striking down tariffs imposed by the US.
The solar industry could also appeal the decision to Congress. However, even if the tariffs don’t remain in place permanently, any challenge is likely to take a long time to have an effect. Solar companies will have to, at the very least, find a way to survive in the meantime.