Nothing new under the sun as Biden decides to extend Trump's solar panel tariffs for another four years.
The Biden administration's plans to address climate change face a serious obstacle: the Biden administration's protectionist trade policies.
On Friday, the White House announced it would extend Trump-era tariffs on various types of imported solar panels and solar cells. Those tariffs were due to expire at the end of this month, but President Joe Biden invoked his unilateral power to extend them for another four years.
The fee will apply at a rate of 14.75 percent this year, with decreases projected to 14.5 percent, 14.25 percent and 14 percent in each of the next three years. Donald Trump's tariffs were 30 percent in 2018 and fell to 15 percent last year.
In addition to the lower rate, Biden's tariff expansion statement includes some technical changes to limit the scope of these import tariffs; for example, double-sided solar cells, known as "bifacial cells," are now exempt from fees. But the overall goal is the same as under Trump: to raise the price consumers will pay for imported solar panels and their components.
But the Biden administration also wants Americans to use more solar power. Indeed, this is a crucial part of Biden's plan to combat climate change. The White House has said that by 2050, solar power should account for half of all US power generation. The administration has already taken steps to free up more state land for solar power, and a key part of Biden's "Build Back Better" plan is a new tax credit for residential solar power.
This is only possible with imported solar modules and solar cells. According to Solar Power World magazine, the United States is expected to expand solar production by around 30 gigawatts this year and by 32 gigawatts in 2023. But domestic production can only deliver solar modules worth around 8 gigawatts a year.
Artificially increased prices due to tariffs have already hit the US solar industry. Abigail Ross Hopper, president of the Solar Energy Industries Association, estimated last year that "The United States has lost 62,000 solar jobs to the impact of the tariffs, including a net loss of 6,000 solar industry jobs." Following Biden's announcement on Friday, Hopper said in a statement that she was "disappointed" with the decision to extend the tariffs, though she welcomed the decision to exempt the two-sided cells.
Meanwhile, the higher prices caused by the tariffs are passed along the supply chain. According to a study by the American Action Forum, solar panel consumers in the United States paid an additional $1.3 billion between 2018 and 2020 due to additional costs caused by fees. The tariffs should also help US solar consumers pay about twice as much per watt of power produced as the average consumer in the rest of the world.
Tariffs mean higher prices and higher prices mean less consumption. That's just basic economics.
The government wants to force consumers to pay higher prices to please domestic solar companies (which have asked the White House to extend tariffs) and then use taxpayer money to offset artificially higher prices with tax credits. to the consumer. And they pat themselves on the back for driving the expansion of green energies, no doubt. But even if the federal government can provide people and businesses with enough resources to meet ambitious White House solar goals, reaching them would be even easier if the government didn't artificially raise the price of imported solar panels.
As economically absurd as this tariff extension may be, the political aspect must be clear. These are no longer Trump tariffs. By bypassing the scheduled expiration and authorizing his own renewal of it, Biden now owns that policy.
It would be nice to see him need some heat for that. When Trump first imposed these tariffs, there was a huge outcry from environmental groups. The Environmental Defense Fund criticized domestic producers demanding the tariffs for prioritizing profits over the climate. "The planet could suffer because every kilowatt of carbon-free solar power that isn't installed is a kilowatt that will likely be replaced by electricity from dirty fossil fuels," Lena wrote.