Skip to main content

What you need to know before buying solar power ahead of Trump’s tariff decision

Following a petition by US solar panel manufacturer Suniva, the US International Trade Commission declared on September 22nd that solar panel imports have hurt US manufacturers. They asked that a tariff of ~40¢/watt be added to solar panel imports. This decision will be finalized before January 12th.

Already, solar panel installers are telling homeowners that they need to install right now to avoid the increase in costs of solar panels. While the decision isn’t final yet, Trump has been said to be in favor of tariffs. And with the probabilities higher than chance, many homeowners are giving their pending solar purchase a second look. Don’t fret, Electrek is here to give you some knowledge, so you can keep your cool, while you shop the marketplace.

First of all, the only piece of the overall installation that will be affected by this case is the solar panel itself. Suniva has requested that something along the lines of a minimum price of 74¢/watt be placed on all imported solar panels. This matters to utility-scale people because the price of standard efficiency, high volume solar panels fell significantly in the last year and a half – from around 60¢/W in late 2015 to 35¢/W in early 2017. For residential customers, the 25¢/W price fall of solar panels was a partial driver for the overall 38¢/W drop in price for residential solar installation between 2015-2017, but not all of it and certainly not as significant as it is for larger-scale projects.

Secondly, the US residential market has been moving toward higher efficiency, higher cost, solar panels for years now. Most of us are paying a lot more than the record-breaking 35¢/W products being used in the largest utility-scale projects. A small number of us are buying the most premium products from SunPower, and paying over $1/W. Higher efficiency panels that many of us are purchasing, like the 19%+ LG Neon, or 17-18% from Hyundai, we’re probably in the 60-80¢/W range already. That means a minimum price of  74¢/W might not hit us as hard.

Other variables matter, 4-6GW of solar panels might be available to the US with no tariffs in 2018. However, the US used about 14.6GW of solar panel in 2016. Multiple (ITEK and CSUN) solar manufacturers have announced US facilities coming online soon. Their announced volumes are small though, less than 0.6GW/year total. Since utility customers have bigger buying power and aggressively move on knowledge, they’ve probably already signed option contracts for the best-priced products coming from potential non-tariff companies.

Tesla’s 2GW Gigafactory in Buffalo will deliver volume – but it seems growth to that number will be slow (years) and probably mostly consumed by a whole new type of residential solar buyer – solar roof tiles.

If Trump’s only mandates is a minimum price around 74¢/W, then those who were searching for the cheapest solar install possible (under $2.50/W) – using the same panels that the utility-scale people buy (Yingli, Canadian Solar) – you might see a 35-50¢/W price increase. Those buying higher efficiency products – LG, Hanwha-Q Cells – you could see pricing go up 20¢/W max. Those of you buying more premium solar panels – maybe nothing.

Of course, there could be other complexities in the market. Maybe Trump limits the total amount of product that can come into the country. SolarWorld has suggested this as a possible solution. That would change a lot of spreadsheets. This outlier possibility, and others, are probably less outlier than normal due to the current political landscape, but residential solar buyers aren’t in a do or die situation. So, unless you really want solar – don’t add these ‘fundamental market shift’ to your spreadsheet (the utility-scale people are though).

If there is a minimum price put on solar panels, and it might be around 74¢ – maybe that means manufacturers will only aim their higher quality product to the US as a lower priced product will be tariffed away. This will only continue a trend of pushing residential efficiency levels higher.

In the end, Trump tariff might nudge US residential solar market toward higher efficiency, but not much else.

FTC: We use income earning auto affiliate links. More.

You’re reading Electrek— experts who break news about Tesla, electric vehicles, and green energy, day after day. Be sure to check out our homepage for all the latest news, and follow Electrek on Twitter, Facebook, and LinkedIn to stay in the loop. Don’t know where to start? Check out our YouTube channel for the latest reviews.