Don’t Let the Sun Go Down On Me: Waiting on Trump to Tariff or Not to Tariff
Everyone in the Solar Industry is waiting on Presiden Trump to see where he is going to go in regards to the Tariffs that may or may not be imposed on countries like China.
President Trump can move in several different directions, and due to his unorthodox way of governing, we may see something happen which doesn’t fit into these options or becomes a hybrid of one or more of these options. Let’s go over what decisions are likely possibilities, and why they would affect American businesses.
First, let’s talk about Tariffs
A Tariff, in this case, is defined as: What is a ‘Tariff’ A tariff is a tax imposed on imported goods and services. BREAKING DOWN ‘Tariff’ Tariffs are used to restrict imports by increasing the price of goods and services purchased from overseas and making them less attractive to consumers. A specific tariff is levied as a fixed fee based on the type of item, for example, $1,000 on any car. An ad-valorem tariff is levied based on the item’s value, for example, 10% of the car’s value. Governments may impose tariffs to raise revenue or to protect domestic industries — particularly nascent ones — from foreign competition. By making foreign-produced goods more expensive, tariffs can make domestic-produced ones more attractive. By protecting these industries, governments can also protect jobs. Tariffs can also be used as an extension of foreign policy: imposing tariffs on a trading partner’s main exports is a way to exert economic leverage. Tariffs can have unintended side-effects, however. They can make domestic industries less efficient by reducing competition. They can hurt domestic consumers since a lack of competition tends to push up prices. They can generate tensions by favoring certain industries over others, as well as certain regions over others: tariffs designed to benefit manufacturers in cities may hurt consumers in rural areas, who do not benefit from the policy and are likely to pay more for manufactured goods. Finally, an attempt to pressure a rival country using tariffs can devolve into an unproductive cycle of retaliation, known as a trade war.
Recap on What is Occurring in Renewable Energy — Specifically Solar
To fully understand how any sort of Tariff or any sort of law in this renewable energy solar market will shake a thriving industry, we need to briefly go over what has been the trend and the success of solar in the past 4 years. We know that the Green Revolution has brought many new businesses, laws, and positioned people into problem-solving traditional energy concerns with new and inciteful products powered by wind, solar, and other sources. We’ve seen this most easily on the freeway with our Hybrid and electric vehicles getting stickers to allow use in that carpool lane — which has been changing over the course of time. Setting the other renewable energies aside, let’s focus on solar.
Solar panels and solar arrays meant to absorb energy from that big beautiful sun out there are becoming a popular and investment savvy way to not only save money, but also to benefit from a cleaner, greener way of living, while also giving the homeowner or business the possibility of going off the grid, and getting away from the utility companies entirely. Slap a battery on the back of your home, and your solar panels can now become their own closed system, feeding that energy not back to the grid, but to the battery storage which takes your home off the grid. This absolutely eliminates the need for Southern California Edison, San Diego Gas & Electric, or whatever gas or electric company you’ve been using.
Water is still another matter. Build a well, or figure that out in another post. But, other than water, you are now generating, collecting and storing your own energy for use later. And this type of set up should be on everyone’s wishlist. Especially, now that Utility companies all over the country are raising their rates, and having their ratepayers pitch in much more than they’ve been used to spending, for now particularly good reason, except for the raises that all the people at the top have been taking for themselves.
And Now What Are Some Possible Outcomes
- Decide Against Pursuing Tariffs
- Broad Tariff
- Sale of Import Licenses
- Exclusion for Solar Technologies Different than Chinese Solar
Donald J. Trump, our 46th President didn’t create this situation, and there certainly needs to be something done — one way or another — to make sure that this industry doesn’t drive itself off the rails. The thing is, this move could stifle the market, and slow the industry — even in the height of its climb. When it comes to Solar Energy and Solar PV Systems, China is not the only monolith in the industry — they are actually #2 behind Germany. We also see solar panels coming in from Japan, Italy, Korea, and the United States. The question is, how much will President Trump push for the U.S. to come out on top, without disrupting the low-cost influx of solar panels from outside of the United States.
These Solar Panel companies are installing panels brought over from China and putting them on US roofs in order to harvest the energy from the sun. This is a perfect storm of situations because the Solar Energy Industry is in a boom right now, and President Trump is looking to bring jobs to America, and not kill them.
There are also other factors to consider. The Tariffs that could be proposed could be broad in nature, affecting all US companies; or the President could make a more nuanced approach and China in a much more structured way to keep US Jobs, while also boosting the productivity within the sector.
One available option is the sale of import licenses that increase the cost of imports, primarily from Chinese companies, while using the licensing fees to support U.S. manufacturing and R&D. Revenue from the sale of import licenses can directly support companies that are committed to innovation, sound business practices and creating the solar technology of the future. Under this scenario, the U.S. wins and China loses.
Whatever happens, be clear that this industry is well under way. Collecting Solar Energy on the top of your roof, and storing it or using it right away and storing the surplus on the grid to get paid out later is such a boon, and is the future of energy in America. It’s clean, it’s green, and hopefully it’s mean enough to get over this hurdle with President Trump.
We will all be waiting to see what happens, and where that pen of his draws the lines for the years to come in an exploding industry ripe for the boom of mainstream usage.
If you’ve read this article, and want some more information on Solar Panels, or Solar PV Systems, don’t hesitate to check out Pingo Solar. Or just give us a call at 760–888–1228. Our technicians can help get you into the solar array of your dreams without breaking the bank.
