In January, the United States government announced it would impose tariffs on imported solar cells and modules. The relief for U.S. manufacturers comes after the U.S. International Trade Commission (ITC) found these imports cause substantial harm to domestic manufacturers. President Donald Trump made the executive decision after his U.S. trade representative consulted with the Trade Policy Committee (TPC) based on ITC discoveries. What do the import tariffs mean for American manufacturers?
Over the next four years, imports of manufactured solar cells and modules will face tariffs that will gradually taper from 30% in the first year to 15% by year four. However, to mitigate affecting American companies that rely on imported solar cells and modules, the first 2.5 gigawatts of imported solar cells will be exempt from the tariff.
A boost for American solar innovation
In the meantime, the U.S. Department of Energy (DOE) Solar Energy Technologies Office and the National Renewable Energy Laboratory (NREL) have announced a competition aimed at rebuilding the American solar industry.
The American-Made Solar Prize will be the inaugural competition of the DOE’s new American-Made Challenge series. The $3 million competition was developed with the intention of lowering barriers innovators face when reaching manufacturing scale. To achieve this, entrepreneurs are tasked with accelerating learning cycles through rapid iteration and testing using the DOE’s 17 national laboratories, partner universities, and energy incubators. The competition will also seek to connect participants with corporate and venture capital sources.
The DOE hopes solar energy enthusiasts, technologists, developers, incubators, and investors will sign up to take part in the competition. Participants will submit innovative solutions to technical problems facing the industry and vote on the best ideas. Teams will then put those ideas to the test, developing solutions in DOE labs in collaboration with experts and investors. The DOE is still finalizing prize rules but, in the meantime, those interested in participating are encouraged to follow updates on the American-Made Challenge forum.
Will the tariffs and competition work?
While the American-Made Solar Prize competition hasn’t started yet, it seems that the tariffs might already be working. Jinko Solar, a Chinese solar company, announced that it will build a $410 million factory in Jacksonville, Florida, which will employ about 800 workers. It is unclear what role the new tariffs played in the Jinko Solar decision since planning for the new facility started long before the tariff announcement. Still, the company’s move could be a hint of what’s to come.
Because of the trade imbalance in the solar industry, many American solar companies have declared bankruptcy or are otherwise facing serious challenges. As such, some Americans prophesy the tariffs could encourage more foreign-owned companies to build factories in the United States, offering more jobs to U.S. manufacturing professionals. However, only time will tell whether import tariffs and the solar prize will help American manufacturers gain an edge in the industry.