The Solar Panel Tariff: Our View on the Impacts

On January 22nd, President Trump announced a 30% solar panel tariff on imported solar panels. See the details of the decision here. What does this mean for the solar industry, for Namasté Solar, and, most importantly, for solar customers?

Solar Tariff Impact on the Solar Industry

This is by no means good news if you support the shift to clean energy. It will slow progress and the growth of the solar industry. However, because solar still offers very attractive economics for customers, progress will continue - even if at a slower pace.

It is important to note that the solar tariff is only on the price of solar panels. The whole cost of going solar isn’t going up, only the cost of panels. Because of this, the tariff will disproportionately impact large utility-scale solar projects because solar panels are a bigger percentage of the overall cost of those projects. Prices for homeowners and commercial property owners will be impacted much less because solar panels make up a smaller percentage of the total cost for those smaller projects.

Impact on Namasté Solar

This trade case has been pending for many months, and Namasté Solar took that time to plan ahead and prepare. Our forecasts were based on a 30% solar panel tariff, so we prepared for and took action based on this scenario. The solar panel tariff is not the decision we wanted, but we were ready nonetheless.

We have been in business since 2005 and have seen many ups and downs in the solar industry during that time. This storm, like others before it, will pass. We are confident that the growth of solar will continue, and Namasté Solar will continue to be a part of that growth. Long-term thinking is one of the core values of our company, and we remain committed to making solar energy easy and accessible.

Impact on Residential Customers

The economics of solar energy have made it a good financial investment for many years now, and though this tariff is a setback, solar remains a fantastic deal for many homeowners. The 30% federal tax credit is still in place, solar still insulates you from rising utility costs, and solar panels still pay for themselves over time. These factors haven’t changed.

The impact of the solar panel tariff on homeowners is minimized in part because we planned ahead for this outcome. Namasté took steps to procure additional solar panels in advance of the tariff and wrote our business plans for the coming year with the tariff in mind. In the past, we have weathered pricing pressures from utilities, reductions in rebates, and other challenges. This is just one more challenge that we are ready to face while still offering clean solar savings to our customers.

Impact on Commercial Customers

The solar tariff will have the most impact on our commercial customers with large installations, but they will also see additional savings from the new tax bill. The tax bill delivered some unexpected benefits in the form of the reduced corporate tax rate and the changes to allow 100% of an asset’s value to be depreciated in the first year. Both will have a significant positive impact on the financial feasibility of commercial solar projects. Because of these tax changes, commercial solar energy will pay for itself in a shorter amount of time, see higher return on investment, and see increased net present values. Read Greentech Media’s assessment of the economic impacts the tax bill will have on commercial solar projects.

The Bottom Line

The movement to clean solar may be slowed by this solar panel tariff, but it will not be stopped. Solar still offers significant cost savings for homeowners and commercial property owners alike and will continue to grow as source of clean, independent energy for our country. It’s one more challenge to face, but Namasté Solar and the solar industry are both here to stay.

 



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