Trump Tarriffs on Solar Announced
Categories: News, Solar Energy, Laws & Government
"In the biggest blow he’s dealt to the renewable energy industry yet, President Donald Trump decided on Monday to slap tariffs on imported solar panels." As quoted by time magazine.
I had first-hand experience in the piano industry as American makers dissolved away to the production capacity of Japan, Korea, and then China, and the great American pianos: Knabe, Mason and Hamlin, Kohler & Campbell, Hallet & Davis, Sohmer, and so many others vanished from the world, and then returned as a label slapped on a Chinese-made piano. How could this happen? Why did it happen?
In the early 2000's, it required about 1000 hours of labor to build a piano. For Steinway, that was $20,000 in labor. For Chinese piano makers, that was $190, or 19 cents per hour. So as a dealer, I could buy a new Steinway baby grand piano wholesale for $45,000, and hope to sell it for $60,000 to $75,000.00. I could buy a whole container of Chinese grand pianos for about $900 each! There were freight costs, and whatnot, but it was a no brainer. Even with the costs of setting them up, a little extra prepwork from my service team, their production advances were gaining more experience than U.S. makers had seen in 50 years. While Steinway was fighting to churn out 3000 pianos per year, Chinese factories were making over 300,000 units each! And affordable pianos took on a new life.
In light of the disparity in wholesale pricing between a $900 piano and a $45,000 piano from China to the U.S, I'm amazed that U.S. solar manufacturers have a chance to survive. They cost about 20-30% more than Chinese competitors, yet escaping labor differences through automation, and through government subsidies, are able to fight for a competitive edge. Is a tarriff on Chinese panels now just kicking the dead horse down the road? Probably yes. I get both sides of this equation since I'm in the solar industry today with a prominent role to play in its future. If someone could have helped American piano makers survive, it might have been a good thing, but to overcome a 50-fold difference in price was economically impossible. Unlike pianos, with solar energy, national security is at issue. If the rest of the world can produce, and we ever have a great conflict, we need to be able to produce plentiful energy at home. So is it harmful to the entire installation industry? For now yes, definitely, in light of our current focus, which has been more than just competing with other solar companies. The solar industry was on the verge of knocking out mainstream power companies with two strokes of advancement. This is definitely a delay for the solar infrastructure transition. But for the long-term sustenance of the industry, where Chinese manufacturers swiped $billions in U.S. government money through solar subsidies while U.S. manufacturers then required government subsidies to survive, this is a move that should curb that tide if just a little.
We in the solar industry will feel it some, as will the consumer. How much? Well I've been working with a development team on a solar calculator. There is a button selector for Asian or American panels, and there you can see the difference between the two. It's about 10% in the overall cost of installation, so not too hefty. It will mean moving forward that it could be cheaper for some American brands than for the asian panels, and consumers will be more likely to end up with U.S. produced panels on their rooftop. The down side is the bottom line, since electricity is pretty cheap in most places. If you buy solar panels, and your payment is more than your electric bill instead of less, you may be less likely to make the purchase. That doesn't mean its not a better value than mainstream electric. It just means the price is going up for a while, but you'll get American made products.
The government benefits by stopping the bleeding of U.S. tax dollars into China, and we should remember that the government is us, so helping that situation helps all of us as much as it hurts one industry for a while.
Sometimes it's hard to see through the decisions, and as much as it bothers me for today when I see installers on the brink of extinction everywhere, my hope is that the next generation will be stronger for it, and that we will bounce back. If you're thinking about a big solar installation, the price is going up just about now.
Host of facebooks' Living off the Grid