Trump’s tax on solar technology is not high enough

Tyler Berkshire, a machinist at Sheffer Corp., shakes hands with President Donald Trump during a speech on tax policy during a visit to Sheffer Corporation, Monday, Feb. 5, 2018, in Blue Ash, Ohio. (AP Photo/Evan Vucci)

This January, the Trump administration announced a new solar tax. This tax is to be put in place in an effort to combat foreign trade’s grip on solar technology and encourage a resurgence of American-manufactured technology. Trump says the tax will allow American companies that have gone out of business to come back strong and, in the process, create more jobs. However, people within this industry believe that the solar tax will be doing this newly-booming industry and the job market more harm than good.

The solar trade argument surfaced last year when solar panel manufacturing companies, Suniva and Solar World, filed a trade complaint to the U.S. International Trade Commission (ITC). They argued that the cheap solar panels produced by Chinese owned solar companies had undercut their businesses. In light of these arguments, Trump jumped at the chance to tax the import of solar panels as his first implementation of his “America First” agenda. However, this tax has been predicted to harm American businesses and jobs overall.

The two businesses that manufactured solar panels relied heavily on machinery and only employed hundreds of Americans, a small number of jobs compared to the 260,000 that are currently employed in the solar industry. The influx of cheap solar panels from Chinese owned companies created a great solar boom in America, employing double the amount of the coal industry. These jobs include installation and manufacturing of solar panel mounts and inverters.

Trump’s solar tax starts with a 30 percent tax on imported solar panels and then drops by 5 percent every following year. This percentage was much lower than advised by the ITC and requested by the American manufacturing businesses. He also decided to allow the first 2.5 gigawatts of imported solar panels to enter tax free, which was much higher than advised. Here is where the problem lies. The only way for this solar tax to be beneficial would be if it were much higher. If a higher tax was put in place then installation would go down because companies would be forced to buy the higher priced American made solar panels. However, in time there would be an increase in American manufacturers and more competition, so the prices would steadily decrease. The tax would then decrease every year, giving America time to catch up with foreign prices and expand our solar industry.

This lower tax will also slow down the import of solar panels into America and the installation of those panels. However, the tax is low enough that it does not guarantee the success of future American solar panel manufacturers. The increase in the price of foreign solar panels would not be high enough to reduce their threat to American manufacturers and would not ensure that installers would choose American panels over foreign made. This solar tax is only slowing down the booming solar industry and losing an estimated 23,000 jobs by 2022. Without the higher tax and ensured success of American manufacturers, these jobs would not be replaced, so in what way would America benefit from this decision?

The only beneficiary from this tax is solar energy’s competitor, the fossil fuel industry. The slowing down of the solar industry would require America to fall back on these older forms of energy. Trump has expressed his love for the coal industry and promised to boost their jobs, but why is he ignoring the solar industry? Since his election, the coal industry has only gained 1,300 jobs, a small number compared to the 260,000 employed by solar energy. If Trump wants to secure more jobs for Americans, he should concentrate on the industry that has already been surging, not an antiquated and polluting form of energy.

It is becoming increasingly clear with Trump’s every decision that his pledge to make America great is really a promise to revert America into what was once great. The fact is that the world is changing and America needs to change with it; trying to hold it back with this nostalgic view of the world will only hurt our country’s and the world’s progress.


Samantha Pierce is a contributor for The Daily Campus. She can be reached via email at samantha.pierce@uconn.edu.