President Donald Trump’s imposition of tariffs on imported solar cells could dampen Maryland’s burgeoning solar industry, officials say.
The United States will levy 30 percent tariffs on solar modules and cells greater than 2.5 gigawatts produced imported. The tariff will decrease by 5 percentage points each following year over a four-year period.
“The (U.S. International Trade Commission) found that U.S. producers had been seriously injured by imports and made several recommendations to the president,” said Robert Lighthizer, the country’s trade representative, in a statement. “The president’s action makes clear again that the Trump administration will always defend American workers, farmers, ranchers, and businesses in this regard.”
The tariffs come after the trade commission found that increased solar cell and module imports caused serious injury to the industry in the United States.
But solar manufacturers and installers in the country are not so sure that the tariffs will help. On the positive side, the industry’s boom could help counter any negatives from the tariff, said Tony Clifford, chief development officer of Standard Solar, a Rockville company. Clifford also sits on the board of the national Solar Energy Industries Association.
“While I would have preferred to see the Trump administration not impose any sanctions on foreign module manufacturers, which would have preserved the solar industry in its current form, the tariffs he decided to impose may slow, but will not stop the U.S. solar industry,” he said in a statement. “The Solar Century is here, and not even unfair tariffs will stand in its way.”
According to an association report from earlier this month, Maryland ranked 14th in the country for installed solar in 2017. Solar produced nearly 3 percent of the state’s electricity.
The state has 218 solar companies, including 14 manufacturers and 119 installers and developers. They accounted for 5,429 jobs.
Most solar manufacturing jobs in the United States do not come from manufacturing cells, the Solar Energy Industries Association said. Of the country’s 38,000 solar manufacturing jobs, just 2,000 make cells or panels.
Beyond the direct costs of the tariff, it could indirectly increase prices through other ways. That includes increasing the costs for producing modules and cells in the country, said Roger Kashlak, a professor of international business at Loyola University’s Sellinger School of Business.
“Forget about the tariff,” he said. “It’s costlier. Our labor costs are more. Our costs of production are more.”
It is also likely that higher prices could decrease the demand for solar energy. That demand has been steadily rising as costs have fallen 55 percent over the past five years.
About $2.3 billion was invested in solar in Maryland last year, up from $745 million in 2016.
“It boggles my mind that this president — any president, really — would voluntarily choose to damage one of the fastest-growing segments of our economy,” Clifford said.