Will Chinese Solar Tariffs Increase Domestic Costs?
While the proposed tariffs on China-manufactured solar panels aim to increase competitiveness for US panels, Lux Research predicts they will just drive costs upward on all solar panels. “It’s not going to have a positive impact on the solar market,” said Fatima Toor, an analyst with Lux Research, an independent research and analytics firm.
Solar industry leaders are still waiting to see what the tariffs will be. Toor said it seems highly likely that the United States Department of Commerce will institute new tariffs on Chinese solar modules. But most expect the fees to be minimal.
Toor said it’s likely Chinese manufacturers will work around the new tariffs and move operations to Taiwan. “If the goal is to cause US installers to favor US manufacturers, that’s not going to be the case,” Toor said.
She said the quality of Chinese panels has increased in recent years and they can compete on quality standards with US panels and will likely still cost slightly less after the tariffs are instituted, especially if her other predictions come true. “The solar supply chain is relatively intertwined,” Toor said.
The United States exports most of the polysilicon used in solar panel manufacturing, which means China currently purchases that raw material from the US. “China is certainly going to be putting retaliatory tariffs on our polysilicon exports,” Toor said. “Those tariffs will drive up polysilicon costs and eventually the cost of US solar modules.”
That will just be the beginning. Domestic tensions between the Coalition for Affordable Solar Energy (CASE), which opposes the tariffs, and the Coalition for American Solar Manufacturing (CASM), which filed the anti-dumping lawsuits against Chinese solar manufacturers that led to the tariff discussion, are growing. “There is already discussion about possible layoff,” Toor said.
While the tariffs will likely force prices up, Toor said the momentum in the US is strong enough that demand for solar energy will most likely to continue growing.
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