In February 2022, President Joe Biden lifted tariffs the Trump administration had placed on solar panel imports. The tariffs only affect a smaller number of solar products.
This decision will reduce 30% to between 14% – 15% on imported crystalline silica solar products over the next four years. The United States will allow twice the amount of solar imports the country has previously allowed, even though bifacial panels are exempted from the levies.
Prior to the tariffs, most U.S. solar products were imported from China. American consumers now have more options in the United States for their residential or commercial properties.
These changes result in a better balance between domestically and foreign-made solar products that American customers purchase.
A LITTLE BACKROUND ON SOLAR TARIFS
In January 2018, former President Trump enacted a safeguard tariff for solar cells. The tariff was 30%. Imported solar panels were subject to a 30% increase in tax, even though legislators intended it to drop by 5% every year.
While tariffs can be a smart way to generate federal revenue they also encourage the domestic production of products. This supports American businesses.
However, companies source most American solar installations from Asia by turning solar. Due to the tariff, fewer solar products were made available on the American market. They also cost more than Chinese products.
The U.S. International Trade Commission recommended that Trump’s administration maintain Trump’s solar tariff after Biden assumed office in January 2021. The USITC felt the tariff should be kept at the same level to protect the U.S.’s solar industry.
WHAT DOES BIDEN’S SOLAR TARIFF CHANGE MEAN?
Consumers will now have more options for purchasing equipment to Go Solar, as Biden reduced the 30% tariff on solar products from 14% to 15% to 15% and doubled its allowed import number.
The U.S. will therefore accept more components of solar panels from foreign manufacturers, particularly in China, and fewer taxes.
Biden made this a significant move. This reduces the barriers to switching to clean energy at a time when people are more dependent on renewable energy. The eased tariffs make it easier to transition to clean energy to reduce climate change.
Biden’s administration stated that it is in talks with Canada and Mexico to allow duty-free or without taxes imports. The administration also exempts a specific type of panel — the bifacial –from the tariff (i.e., taxes, levies).
Biden exempts bifacial panels from solar radiation. This allows the U.S. to continue generating solar power at the rate needed to reach its clean energy goal. Bifacial panels can produce more solar power in a shorter time than one-sided panels.
THINKING FORWARD MEANS BEING SOLAR
American solar producers will need help to compete against China’s mass production of cheaper solar equipment. The Biden administration wants to make solar more affordable for American consumers. This means that they will accept imports to increase the availability of solar products in the U.S.
This is crucial, especially with the rising national demand for Solar. Even so, American solar producers have only 20% of the capacity required to produce the country’s installed capacity. Simply put, the Chinese are providing a boost to our solar industry.
According to the Biden administration, achieving national clean energy goals is more important than improving the domestic solar industry. The administration is not content to watch as American solar producers struggle.
Biden approved a bill committing about $300 billion to scientific solar research by February 2022. This bill provides $600 million in loans and grants for domestic solar manufacturing.