- President Donald Trump signed off on a new 30% tax on imported solar panels Tuesday.
- But
- most of the US jobs in the solar sector aren't in manufacturing, they're in installation.
- US companies say they're bracing for "meaningful job loss" because of the decision.
- But because the tax isn't permanent and is not as high as some had feared, solar installer stocks aren't taking a hit yet.
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Trump just dealt a major blow to the fastest-growing job market in the US
Experts estimate the new tariffs the administration slapped on imported solar panels could cost the US 23,000 jobs in the next year alone.
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Nearly every solar panel that will be put on a roof in the US just got a little more expensive.
On Tuesday, President Donald Trump signed off on a new, temporary, 30% tax on imported solar panels.
Trump heralded the tariff as a job-creating measure on Tuesday, saying "we’re going to make our own product again. It’s been a long time."
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But most solar companies in the US say that's just not true.
As Bloomberg reports, about eight of every 10 solar panels in the US come from abroad, which means the new tariff will deal a serious blow to the solar industry in the states.
The Solar Energy Industries Association estimates that the new tax will cost about 23,000 jobs in 2018, since fewer people are expected to buy panels at the higher price. (For a typical rooftop-style 250-watt solar panel, the price hike comes out to about $25 extra dollars a piece.) The job losses could include solar panel installers, manufacturers who make metal racks for holding the cells, and companies supplying add-on parts like inverters and machines that track the sun to improve cell performance.
US solar-cell producers, who this tariff is designed to help, employed 1,300 workers at their peak in 2012, according to the Associated Press. But the larger industry related to solar installation and solar energy in the US employs roughly 200 times that number of people. Currently, 260,000 people work in the US solar industry, earning between $26 and $45 dollars an hour on average, according to a recent report from the Environmental Defense Fund.
According to a US Bureau of Labor Statistics analysis from October, solar photovoltaic installer was ranked the fastest-growing occupation, with an estimated growth rate of 105% between 2016 and 2026.
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Kevin Bassalleck is the president of the Albuquerque-based company Affordable Solar, which is working on a $45 million solar farm to power a data center for Facebook. Bassallec told Business Insider in an email that the new tax will "of course lead to a significant reduction in solar demand in the US market," and cause some consumers to re-think the idea of switching to solar energy.
"The gains that may materialize in module manufacturing won’t be nearly as much as the near certain losses in the rest of the US manufacturing supply chain and installation jobs," Bassalleck said.
In 2016, new solar capacity around the world grew by 50%, according to the International Energy Agency. For the first time, the capacity of new solar installations rose faster than any other fuel, including coal. The EDF now estimates that demand for solar will fall 9% because of the new tax.
But the tax may not be completely catastrophic for the US solar industry. In November, Bloomberg reported that a tariff of 30-35% would make the price of a solar module close to what it was for developers in the fall of 2016.
Plus, the tariff isn't permanent — it will decrease incrementally over the next four years to a final tax of 15%.
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