There are better ways to foster solar innovation and save jobs than Trump's tariffs

There are better ways to foster solar innovation and save jobs than Trump's tariffs

President Donald Trump's decision to impose punitive duties on imported solar panels and related equipment is rankling most of the industry.

This was the final step of a process that began when two U.S. subsidiaries of foreign solar panel makers filed a rarely used kind of trade complaint with the International Trade Commission. Trump largely followed the course of action the independent U.S. agency had recommended to protect domestic manufacturers from unfair competition.

But far from protecting U.S. interests, the tariffs are bound to stifle the current solar boom, destroying American jobs and dragging down clean energy innovation. As economists who research climate and energy policies that can foster a greener North American economy, we argue the government should instead create targeted subsidies that support innovation and lower costs across the supply chain. This approach would do a better job of helping the U.S. fend off foreign competition without harming the industry itself.

A booming industry

The U.S. solar industry has enjoyed unprecedented growth in recent years, thanks to the rapidly declining cost to install solar systems and tax breaks for homeowners, businesses and utilities that have expanded demand but are being phased out. Prices have plunged to roughly US$1.50 per watt from around $6 in 2010 due to both innovation that made it less expensive to make panels anywhere and cheap imports.

In 2016, 87 percent of U.S. solar installations used foreign-produced panels, also known as modules, primarily from China.

The rapid decline in solar panel costs has been driven by policies in China and elsewhere intended to expand domestic manufacturing of these products.

The problem is not unique. Other countries dependent on cheap solar imports, including Germany and Canada, are also grappling with how to sustain the solar boom while protecting their own domestic manufacturers from unfair foreign competition.

The trade commission sent Trump its recommendations in the fall of 2017, giving him until Jan. 13 to accept or reject its guidance. Later, U.S. Trade Representative Robert Lighthizer asked the agency to draft a "supplemental" report, which effectively extended the president's deadline for setting the tariffs.

The request, observers surmised, may have signaled concern about the this case's potential to spiral into a broader trade dispute with China and other major U.S. trading partners.

That may explain why the duties imposed are not as steep as the maximum 35 percent rate the U.S. International Trade Commission had recommended. The tariffs will begin at 30 percent and then taper down in 5 percent increments over four years, ending at 15 percent in 2022. And they won't apply to the first 2.5 gigawatts worth of imported solar cells, which domestic manufacturers use to build panels made in the U.S.

There are better ways to foster solar innovation and save jobs than Trump's tariffs

Solar job growth

Solar job growth took off in 2010. By 2016, more than 260,000 Americans worked in the industry, up from fewer than 95,000 seven years earlier.

An uninterrupted solar boom would create even more jobs. The number of solar panel installers, for example, would more than double from 11,300 to 23,000 within 10 years at the current pace of growth, which would make it the fastest-growing profession, according to the Bureau of Labor Statistics. Another renewable energy mainstay, wind turbine technician, came in a close second.

Imposing tariffs on imported panels would cloud that outlook, largely because manufacturing accounts for less than 15 percent of U.S. solar jobs while installation amounts to more than half of them, according to the Solar Foundation's annual census. If panels get more expensive, the cost to go solar will rise and demand will fall – along with the impetus to employ so many installers.

The Solar Energy Industries Association, a trade group that represents many companies in the industry, objected to the new duties, saying they could cost the industry 23,000 jobs in 2018.

Smarter subsidies

Despite the robust growth in wind and solar employment and its official support for an "all of the above" energy policy that combines fossil fuels, nuclear power, biofuels and renewable energy alternatives like wind and solar, the Trump administration has sought to slash support for alternative energy through the federal budget.

We agree that the government should encourage solar panel manufacturing within the nation's borders. But there are better ways to support this important priority than by raising prices on imported equipment through punitive tariffs.

China's edge in solar panel manufacturing – apart from low wages – is driven by scale and supply-chain development, spurred by cost inducements like low-interest loans, technology development assistance and cheap land. Other newly industrialized countries like South Korea and Taiwan have followed China's lead by fostering their own solar manufacturing bases with targeted subsidies.

We believe the U.S. should follow suit. In addition to directing subsidies to reduce the costs of the solar supply chain, the government should also increase subsidies for private research and development for green innovation. Currently, federal financing for private solar R&D lags far behind levels seen in China and the European Union.

These subsidies could be funded by the tariffs the government was already collecting on solar panels imported from China and elsewhere before these new duties were considered.

There are better ways to foster solar innovation and save jobs than Trump's tariffs

If the U.S. government deems that additional restrictions are required, then it makes sense to follow a separate recommendation to freeze solar panel imports at 2016 market share levels. The government should then auction off the rights to import foreign solar panels to U.S. installers.

The government could spend the proceeds from these auctioned import licenses on domestic innovation and other efforts to cut costs for U.S. manufacturers of and related equipment.

While World Trade Organization rules limit the use of subsidies that explicitly promote a country's exports in global markets, the ones we are proposing would likely be WTO-compliant.

This is because their aim is to make the U.S. solar industry more competitive within the domestic market, given the government's earlier findings that cheap imported panels are being dumped – sold too cheaply – here.

Why make an exception

Like most economists, we believe that subsidies should be avoided except in special circumstances. Here are three reasons why this industry is an exception.

First, when one nation subsidizes solar panel production and exports those panels, it makes it cheaper to go solar in other countries, effectively cutting the cost of implementing climate policies abroad.

Second, when solar energy replaces fossil fuels in one place, the declining carbon emissions benefit people around the globe. Climate change, after all, affects the entire world.

Third, R&D investments made in any one economy eventually add to the global knowledge base. Improving solar technology will ultimately benefit the entire industry worldwide.

The Trump administration's solar tariffs will yield none of these benefits. In fact, they could instigate a trade war over clean energy products with our trading partners globally.

That is why we believe that the smarter subsidies we are proposing are a better way to sustain the U.S. solar industry and protect jobs.


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Better ways to foster solar innovation and save jobs

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Jan 23, 2018
the tariffs are bound to stifle the current solar boom, destroying American jobs and dragging down clean energy innovation.


As the whole industry is based on and exists thanks to massive subsidies, the opposite is true. The cost of the subsidies are stifling jobs and dragging down innovation elsewhere. If subsidies have to be paid, the money should at least return to the economy rather than flow out across the border.

The society can't build on imported solar panels any more than it can build on imported oil. Solar panels can me manufactured in the US just as well, but the Chinese are applying predatory pricing and dumping old technology at cut-rate prices on the market to keep their competitors down, which is then exploited by "green" companies in the US who are simply in for collecting the subsidies - not for advancing or innovating on clean energy.


Jan 23, 2018
Nope. We all will have to pay more now. Glad I was an early adopter.

Has Trump done ANYTHING positive for America?

Jan 24, 2018
As the whole industry is based on and exists thanks to massive subsidies
Perhaps so. Same thing with the nuclear industry. But we need energy, and we need to cut emissions. China seems to have pushed us into a no win situation. We either buy all our panels from them, or try to counter their dumping with either tariffs or subsidies. I guess we will have to wait and see how this plays out. Perhaps what Trump did was the smarter move. I am confident enough in the technology to believe the domestic market will keep on rolling - and 4 years from now a 15% tariff will probably not affect much. We could drop the domestic cost in half (that may be an exaggeration) if we just streamlined the red tape - https://www.green....TDv2deQ

Jan 25, 2018
The tariff is 30%, and the job losses are predicted to be about 20,000 installers and their companies. Why should consumers be punished for the sake of two solar companies out of hundreds?

Jan 27, 2018
Why should consumers be punished for the sake of two solar companies out of hundreds?


Consumers will save the tax money to import millions worth of solar panels that produce electricity that is valued lower than the subsidies paid for it. Cutting off unproductive work paid by public dollars is not a punishment but a boon. It's a saving in the full scheme of things.

By stopping the imports, there can be more than two domestic companies producing solar panels and the whole system can be developed on a more rational basis.


Jan 27, 2018
"Has Trump done ANYTHING positive for America?"

Yea, he derailed the Clinton crime family for one.

Jan 27, 2018
Plus that he has put at least a temporary road block up to the agenda of the deep state. That is why both parties hate him and why a silent growing majority loves him.

Jan 27, 2018
I think Eikka is unaware Trump imposed the tariffs for just two companies, and one is owned by CHIINESE investors. Doing that, Rumpy cost us tens of thousands of jobs for installers.

So who is he helping?

Jan 27, 2018
Trump is generally a very low intelligence person. Might be a side effect of constant lying. But he makes up for it by surrounding himself with imbeciles, so that he appears to only be mildly retarded. The best outcome I can think of for Trump is his kicking air from the end of a rope for his treason.

Of course at this point, if all the traitors were hung, there would be very few Republican politicians left alive.

Sorry for the rant, it strayed just a bit off topic. But Trump's actions to this point have all been aimed at killing off any incentives for the USA to move toward a successful future, including economically.

Jan 27, 2018
Will somebody tell Rumpy about Smoot-Hawley??

ANYBODY???

Jan 27, 2018
Zzz and Gkam don't you realize that ALL republicans are portrayed as dumb. If you constantly fall for the same portrayal I know who the real dumb ones are.

Trump is so dumb that he did nothing to interfere with the Russian investigation. Who has the most to fear from this investigation now,,,,, Hillary and the Democratic party that is who. Yea, how dumb is that!

Jan 27, 2018
He has let the FBI destroy its own reputation by letting it show itself as politically motivated organization just like the KGB.

He is working on destroying the deep state and doing a damn good job of an impossible task.

Jan 27, 2018

Of course at this point, if all the traitors were hung, there would be very few Republican politicians left alive.

From the outside it's not entirely apparent which it is: either there are a lot of low IQ bumblers amongst the republicans who genuinely mean to do good but are just hopelessly incompetent or whether they are cpable men actively working to wreck the US.

The result is the same in any case.

Jan 27, 2018
Anti you are entitled to your opinions but if the democrats are so intelligent why do they still refuse to acknowledge that the Clinton Foundation was little more than a front for an influence peddling operation. It wasn't eh, and its shutting down right after she lost the election was pure coincidence correct?

Jan 27, 2018
So let me get this straight. Everyone who is against this tariff would rather see their solar panels manufactured in a country has virtually no water pollution, air pollution and child labor laws rather than in the US which has all of these protections. You complain that our corporations do not offer adequate health insurance but care little about those in China.

Jan 27, 2018
I thought you were one of those Magic of the Market guys, who eschewed guvmental interference.

Jan 27, 2018
Yea magic US markets not China. You hamstring US companies to the point that they have to move operations to China. Trump is just trying to correct your errors.

Jan 28, 2018
MR
the Clinton Foundation was little more than a front for an influence peddling operation. It wasn't eh, and its shutting down right after she lost the election
This is off topic - but you brought it up. You have clearly stated in the above quote - that the Clinton Foundation shut down after the election. Please provide evidence of this.

Back on topic - this is clearly a complex subject - and protecting the banksters of Wall Street who are up to their asses in liability with these 2 Solar Companies involved is probably of note. https://cleantech...r-think/

A quote for MR
Of all the people in the world who are misinformed on these issues, he may be the most clueless. It is simply unfortunate that so many have to suffer at the hands of an egomaniac who doesn't read and spends his days learning about the world from Faux News.

Jan 28, 2018
https://spectrum....ou-think

Onions as an environmentalist I would think that you would like to encourage clean worker freindly US manufacturing rather than the unregulated manufacturing in China.

Jan 28, 2018
166 as a government-hater, I would think you would be happy to see China not having any strict laws getting in the way of business.

Jan 28, 2018
"166 as a government-hater, I would think you would be happy to see China not having any strict laws getting in the way of business."

Nope as a lover of the US I would hope that the progressives would go to China and make their system more effed up than as ours.

Jan 28, 2018
MR
I would think that you would like to encourage clean worker freindly US manufacturing
I totally do MR - and if you read my comment above - (3rd comment on the list) - you would see that I recognize the no win situation the Chinese have put us in - and that I do support manufacturing in a system like ours - that has more safety/environmental controls. I am also able to recognize that things are not always what they seem - and perhaps Trump had an alternative motive behind his move.

Now where is that link I asked you for - regarding the shutting down of the Clinton Foundation.

For the record - I despise the Clintons.

Jan 28, 2018
This article is an awesome read regarding First Solar. They are not subject to the tariffs, and have the lowest production costs in the world (20 cents per watt). Unless other manufacturers can match this - First Solar will become a behemoth. Either way - Trump and his revival of coal is just pathetic. https://www.bloom...-the-sun

Jan 28, 2018
https://www.inves...ry-isnt/

Well perhaps it is just the fund raising part.

Jan 28, 2018
Well perhaps it is just the fund raising part
I'll rephrase that for you "Well perhaps I was wrong." Yes you were wrong - but truth does not matter to you - right? Just say what ever you heard on Faux news - and who cares if someone notices that it is fake.

The U.S. government is a cesspool of corruption. It does not matter if it is the Clintons, The bushes, Obama, or Trump. The government is bought and paid for by special interests - who simply pay for access. The Clinton's are for sure some of the worst. What Robert Mueller comes up with regarding Trump, Deutsche Bank and international crime syndicates will be fascinating. Mueller already took down John Gotti, and Sammy the Bull - who's next?

https://www.vanit...the-bull

Jan 28, 2018
Onions before you revel in the attempted takedown of Trump you should think a bit and imagine
how that will limit who would dare run for office in the future. That would pretty much guarantee that only members of the club would run and the people would not really have a choice in the matter. Who would run for office and subject themselves to 8 years of a special prosecutor looking into every facet of their life? This is only happening because Trump is an outsider to the system.


Jan 28, 2018
WOW Trump took a photo op with President Clinton! Well,,,,,,that changes everything.

Jan 28, 2018
This is only happening because Trump is an outsider to the system
I don't agree. I think it is happening because Trump is in bed with international criminal gangs - and the chickens are coming home to roost. https://www.polit...e-213910
https://www.nbcne...-n821706
https://www.thena...-of-him/

Donald Trump is the only president in recent history who refuses to release his tax returns. Wonder why!!!!

Jan 28, 2018
Stupid link, Trump tied to the mob. Ever hear of a president called JFK and his fathers ties to the mob?

Jan 28, 2018
I guess you have to be an economist to understand why we should support subsidized foreign manufacturers and a relatively small number of domestic laborers whose jobs are installing imported products when those same laborers could just as easily install domestic product.

Maybe, in addition to the tariffs, the Trump administration should consider cutting per-kilowatt rebate checks for those consumers who buy US made solar panels made with US manufactured cells. But no subsidies for research and no subsidies for manufacturers, let Wall Street deal with risk.

Jan 29, 2018
Ever hear of a president called JFK and his fathers ties to the mob?
That is the response of five year old - right? It is the old - "well he did it too" - argument. Do you think that makes it right for Trump - because JFK did it too? You just support my recent premise - that the American political system is a total cesspool - all sides of the aisles. And yes - I am totally aware of the Kenedies connections to organized crimes - as well as JFK's drug addictions, and love of sex with many different partners - http://www.gq-mag...sination

Wow - he sure had a lot in common with the Donald....

Jan 29, 2018
Look Onions you cannot build any large project in the US without interfacing with the Mafia since they control all of the Unions. I can't believe you brought that issue up while ignoring the Clinton Crime Family. After all he WAS running against them.

Jan 29, 2018
Anyhow, when you have the DOJ, FBI and god knows who else all trying to get rid of him that is a really good sign. If you care anything about the world you would want to destroy the deep state. If Trump is their agent as you claim then we have reached a political tipping point which is even more dangerous than any climate tipping point since we all might as well be dead anyway.

Jan 29, 2018
The DoJ is just doing its job.

They are facing the greatest case in our history, a case of international money theft and the intrusion of an enemy state into our Executive Branch of Government.

We will have it ripped out.

Jan 29, 2018
Gkam were you referencing the investigation of Hillary or Trump?

Jan 29, 2018
Do you mean the $60,000,000 you conservatives squandered on "BENGHAZI!!? How many hours did Hillary spend under oath, a professional politician on whom your folk could get NOTHING?!?

They are just as incompetent to run our government. They let Putin tell them what to do.

Jan 29, 2018
While we are on the subject of political crimes why not mention the Seth Rich assassination. Hillary and the DNC had nothing to do with that right.

Jan 29, 2018
As the whole industry is based on and exists thanks to massive subsidies, the opposite is true.
This is why I deride you, @Eikka. You just make stuff up.

Jan 29, 2018
Trump's actions to this point have all been aimed at killing off any incentives for the USA to move toward a successful future, including economically.
Actually I think differently. Traitor, yes most likely, but in policy terms that's not the problem. Trump's agenda isn't about something negative; it's about something positive but misguided, and potentially and willfully, but not intentionally, destructive to the wealth of the US. He's stupid and crafty, not smart and traitorous.

Unfortunately that also means that he accepted the help of Putin without realizing what it would mean.

Remember that ignorance of the law is no excuse.

Jan 29, 2018
@MR, this is the kind of thing that makes me put you on ignore. Right now the Democratic Party is in disarray. I predict a stock market dip in the summer in order to try to scare everyone into voting for Republican legislators in the fall. I am selling Oracle while the market is good. I expect if I waited I'd get more but the risk is beyond my envelope.

Talk to me about economic crimes and acts opposed to middle-class stock ownership. I was there and watched. The middle class was taken and the money transferred to oligarchs.

Jan 29, 2018
" I am selling Oracle while the market is good. "

Good idea. The market under Obama was built on a solid foundation, but this is just "extreme exuberance", as one old Republican put it.

Now we have a long way to fall.

Jan 29, 2018
MR
Anyhow, when you have the DOJ, FBI and god knows who else all trying to get rid of him that is a really good sign
It is a really good sign that he is a crook. Mueller went after Gotti -
now he has Trump in his sights. That is what prosecutors do. Nowhere have I indicated that the Clintons are not crooks. They are crooks. The scale of crookery is far greater under Trump. Look at Paul Manafort. MR - I challenge you to find me any evidence that suggests that the Clintons were anything close to that piece of shit Manafort. I can give you dozens of links.
https://www.theda...rs-lobby
http://www.slate....nts.html

I could continue all night. I could do the same for the Trumps.

https://www.fastc...-problem

The fascists are working together. Look out...

Jan 30, 2018
The Republicans and Democrats are playing a very dangerous game trying to connect the election to Russian influence. They actually passed sanctions against Russia to validate this fake story. Since that time relations have plummeted. If there is armed conflict they will be as much to blame as Trump.

Jan 30, 2018
A mountain of evidence points to a single fact: Russia meddled in the U.S. presidential election of 2016


http://www.politi...-made-s/

Back on the subject of energy -
Unsubsidized onshore wind and utility-scale solar are both cheaper than new coal in many parts of the U.S., and are cost-competitive with combined-cycle natural gas on a levelized cost basis
From - http://www.theene...w-can-go

Jan 30, 2018
Will somebody tell Rumpy about Smoot-Hawley??

ANYBODY???
"Psychopaths make their way by conning people into doing things for them; obtaining money for them, prestige, power, or even standing up for them when others try to expose them. But that is their claim to fame. That's what they do. And they do it very well."

-Well, except the incompetent ones like georgie.

But its not as if they need these things to get done. Its the thrill of the con that is their motivation. George conned at least 15 supervisors into hiring him for jobs he wasnt interested in keeping.

And of course, he didnt.

Feb 02, 2018
China to build solar panels in US!!!!!!
https://lidblog.c...tariffs/

Trump is 100% correct eh guys.

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