Trump, Trade, & the Price Of Solar Modules
As President-Elect Donald Trump prepares to enter office, financial analysts have expressed concern over his promise to increase tariffs on imported goods in the United States. On the narrow issue of whether protectionism will drive a material increase in solar module pricing, we don’t think it will.
As a result of previously settled trade disputes, duties imposed by the U.S. Commerce Department set current tariffs on Chinese-manufactured solar modules between 20–35%. Still, the U.S. solar market continues to surge, resulting in nearly a doubling of solar installations between 2015 and 2016.
The Global solar industry continues to invest in R&D to develop less expensive and more efficient modules. Five years ago, a solar panel cost over $5 per watt with 15% efficiency. Today, you can buy the same panel for $0.45 cents per watt with 20% efficiency. The trends are clear, solar is getting cheaper at an accelerating rate. The global growth of solar, increased efficiency, and oversupply of modules continues to drive downward pressure on module production costs.
Lastly, the global demand projections for solar energy remain incredibly strong. India, China, and areas within the Middle East are quickly advancing their solar installed base, which will continue to put downward pressures on the global price of solar modules.
