Other than the strange and fruity wardrobe, Robin Hood and his Merry Men had a noble agenda in England back the middle ages, i.e. rob the rich and give to the poor. They probably kept a little back for themselves for expenses, i.e. something to make the men merry plus some bling for Maid Marion, but overall they fought a worthy fight for social justice and equality. Fast forward a few centuries to 2018.
Our modern-day Robin Hood wannabe comes in the form of Robert Lighthizer, the US Trade Representative (USTR), who recently announced that tariffs will be imposed on virtually all silicon-based foreign-made solar cells and panels entering the US effective February 7, 2018. This is a four-year program that starts this year with a 30% tariff, and which then decreases by 5% each year ending up at 15% in year four.
Now, unlike the anti-dumping and unfair subsidy tariffs that have been in place since 2012, these new tariffs are not aimed exclusively at one or more countries of manufacture. Those tariffs originally singled out China, but the Chinese manufacturers then started country-hopping and ended up producing solar panels in other countries to avoid the stinging tariffs when imported into the US.
Not to be caught out, Mr. Lighthizer has taken a different tack this time around and has herded all major nations world-wide (there are exclusions for certain “developing countries”) into the dock for judgment and punishment. This time there is no country-specific element and it’s the US versus the rest of the world.
The issue at hand here is whether foreign solar companies who are able to import solar products into the US at less cost than the available domestic equivalents have an unfair advantage in the solar marketplace. The plaintiffs: Two large US-based solar companies.
The crying started in May last year when Suniva, which was 63% Chinese owned and now bankrupt, petitioned the International Trade Commission (ITC) that “increased imports were a substantial cause of serious injury to the domestic industry”. Suniva was later joined by SolarWorld Industries Americas, then a subsidiary of German owned and now reorganized SolarWorld Industries AG.
After much deliberation, our Robin Hood of Washington Forest has decreed that US solar manufacturers must have some sort of “safeguard” in order to compete fairly against foreign solar manufacturers, and these latest tariffs are the result. Whether this is a correct and/or fair judgment is up for debate, but I for one don’t quite understand how this is going to help the US solar industry much, if at all.
Paradoxically, those foreign solar manufacturers will not be paying any penalties, and our Robin Hood will not be robbing them and giving the proceeds to the now defunct plaintiffs. No, the tariffs will actually be paid by those US companies that import foreign solar products, and the burden will then be passed on down to the end user.
No one in the solar food chain will be losing money, but the home owner, according to some, will end up paying an estimated 3% more for a roof-top solar installation. That’s not too bad is it, $300 extra on a $10,000 installation? Large scale solar plants will suffer more, with a 10% cost increase being suggested, and this reflects just how small a proportion of the total overall cost the actual panels themselves represent.
But where does the money go? I see nothing in the actual Proclamation that says how the money collected under the tariff will be distributed. The answer may lie in the suggestion that the real parties of interest in all this are the Wall Street investment banks that invested heavily in the two petitioning companies and then lost a bundle when it all went sour.
Maybe the plan is that the proceeds of the tariff be divvied up between those investment banks, but that would mean essentially that lowly Joe Homeowner will end up being robbed in order to pay Big Boy Investment Bank while the accused get off scot free. It would appear that Washington Forest USA, with or without a swamp, is a very different place from Robin Hood’s medieval stomping ground of Nottingham Forest UK.
How does all this affect the marine and RV solar market? I have no good news on that front I’m afraid, as the solar products we import don’t fall into any of the exclusion categories, no matter how hard I try to squeeze them in!
Our marine/RV panels are as far removed from the residential/commercial panels targeted by the tariffs as chalk is from moon cheese, but that seems to have escaped Washington’s attention. As I see it right now, any solar panels over 27 watts that we import from Feb 7 onwards will be subjected to the 30% “safeguard” tariff, and there’s absolutely nothing we can do about it. We’ll probably see somewhere in the region of a 15% increase in the retail price of specialized marine/RV solar panels, with around 10% or less being added to a typical complete installation by a marine electrical/solar specialist.
There is a provision in the Proclamation that some means of requesting an exclusion for a particular product is to be published within 30 days of the implementation of the tariff, so my radar will be tuned in for that. But even if we do manage to get our marine/RV solar products excluded, it will no doubt be a fair way into 2018, and by then we’ll have paid a tidy sum in tariffs and have a real battle on our hands to get any form of compensation.
On a brighter note, the Residential Solar Energy Tax Credit (IRS 5695) is still alive and well and represents a 30% credit against federal income taxes through 2021. This is not restricted to solar installations on primary residences, and so is applicable to second and subsequent homes, and that includes boats and RV’s that have cooking, sleeping, and toilet facilities. By the way, that credit is 30% of all costs of a complete solar installation, including parts and labor, so that will more than offset any negative impact these new tariffs might bring for American customers who are lucky enough to pay US income tax.
For now we’ll just have to hope that sanity prevails and that somehow the tariffs will be postponed and then reviewed due to pressure from the World Trade Organization (WTO) and other organizations. I have petitioned my Senators and Congressman and urge others to do so, and will be pleased to hear from anyone with any influence who might be able to help.
I even thought about popping down the road to The Capitol building and parading in protest outside with a couple of Solara Power M 140 panels lashed together and worn as a sandwich board. But it’s a tad too cold here for that right now, and besides, we’re selling all the panels we can get our hands on these days and have none to spare for such a jolly jape.