President Biden has a big decision coming up. U.S. tariffs on solar panel imports are set to end on February 7. The president must decide whether to keep the tariffs, or let them expire.
If the American people have any say, the president will continue the tariffs. That’s because a new poll conducted by Morning Consult found 90 percent of voters think the U.S. should manufacture its own renewable energy systems. And 70 percent want the U.S. to end its dependency on solar imports from China.
But how can tariffs grow America’s solar industry?
In January 2018, the Trump administration imposed tariffs on imports of solar panels. This followed a lengthy investigation by the U.S. International Trade Commission (ITC) into China’s dumping of solar panels in the U.S. at less than fair-market value.
As a result of Beijing’s massive government subsidies, Chinese solar imports grew roughly 500 percent from 2012 to 2016. By 2017, the U.S. solar industry had almost entirely disappeared. The 2018 tariffs were designed to help America’s solar industry survive in the face of China’s strategy to dominate the industry globally.
The tariffs worked extremely well. In the last four years, America’s solar manufacturers have ramped up production—and in 2019 reached a 10-year market share high of almost 20 percent.
Why did the tariffs succeed? China has been heavily subsidizing its solar industry for years—all in an effort to put U.S. producers out of business. The tariffs started to level the playing field, allowing U.S. companies to build new factories and start supplying critically needed solar panels.
Once the tariffs were in place, U.S. manufacturers quickly built new factories with the latest technology—and to such an impressive degree that solar prices actually dropped after the tariffs were imposed. The average price of a solar panel in 2017 was 48 cents per watt. By 2019, the average price had dropped to 40 cents.
The ITC is now recommending that the tariffs be extended. And U.S. solar producers agree. Q Cells—a Georgia assembler of solar panels—recently announced a $160 million investment in U.S. polysilicon production.
It makes little sense for the U.S. to keep importing solar panels from Chinese factories dependent on the coal-fired power plants that contribute to climate change. And many of these coal plants are located in the Xinjiang region, where Beijing is committing genocide against ethnic Uyghurs.
The ball is now in President Biden’s court. He must decide whether America’s solar future will be made at home or in China. The decision should be obvious, considering that China’s solar panels must be shipped across the ocean after being produced through forced labor and toxic environmental practices. Voters have decided that it’s far better to create good jobs and a sustainable energy future here at home. That’s what targeted tariffs can do—strengthen an important U.S. industry while competing more fairly with an aggressive China.