New Tariff on Solar Panels a Downer, Not a Deal Breaker

With co-op and condo boards leading the way, a growing legion of New York City building owners have been embracing the benefits of solar energy – reduced reliance on fossil fuels, lower energy bills, and less damage to the planet’s environment. Today, as costs continue to decline and tax incentives remain robust, there are enough solar panels installed in the city to power more than 35,000 apartments. And more co-op and condo boards are looking into joining the party. 

So an understandable chill went through the city’s solar community when President Trump, as part of his America First campaign pledge, announced that he will slap stiff tariffs on cheap, imported solar panels, primarily from China. A 30-percent tariff goes into effect Feb. 7, declining annually until it is phased out after four years. What effect will the tariff have on the city’s solar industry? 

“We’ve received quite a few calls and emails from the co-op and condo boards we’re working with,” says Noah Ginsburg, director of the nonprofit Solar One’s “Here Comes Solar” program, which helps New York City building owners and community groups navigate solar installations. “Anything that drives up the cost of solar energy is bad from an environmental point of view. The flipside is that the tariff’s impact on a co-op or condo that’s thinking about going solar is not that large. This is not dramatically driving up the cost to the end consumer.” 

The cost of installing a solar-energy system is about $3 to $3.50 per watt of electricity produced, Ginsburg says. The tariff will add about 10 cents per watt – meaning it will increase the cost of solar projects by 3 to 5 percent. That’s not nothing, but Ginsburg doesn’t believe it will be a deal breaker for most boards. “It’s not a positive,” he says, “but even when we factor in the additional costs, solar energy is still a good investment, with a typical co-op or condo in New York seeing a payback in five to seven years.” 

That’s not to say the tariff will have zero impact. The U.S. solar industry currently employs 260,000 Americans, with more than half of them – 137,133 – working in installation. Less than 2 percent of the jobs are in solar panel or cell manufacturing. Therefore the tariff, like so many actions of the Trump administration, is more bluster than substance, a showy attempt to protect a few American jobs that will have the effect of hurting most of the Americans who work in the industry and driving up the cost to American consumers. 

This isn’t the first misguided attempt by the U.S. government to protect the domestic solar-panel manufacturing industry. Six years ago, the Washington Post reports, Chinese solar panel makers evaded U.S. tariffs by relocating to Taiwan, and the Chinese government retaliated with its own duties on U.S. exports of the raw material used in making the panels. As a result of the pushback, leading American manufacturers laid off more than 1,000 workers and scrapped a planned $1.2 billion factory. 

Nevertheless, Ginsburg is optimistic that New York City’s burgeoning solar industry will continue to expand. “The solar panel import tariffs could temporarily dampen growth in the solar market,” he says, “but solar continues to be one of the best investments that a building owner can make.”