There has been a lot of uncertainty in the US solar market in the last few years. The US Department of Commerce has been investigating claims that solar panel manufacturers in Southeast Asia have been circumventing tariffs placed by the US on panels made in China, and US solar companies, as well as solar customers, have been worried that enforcing the tariffs could mean a huge increase in prices.
But there have been big sighs of relief, even if there is still some uncertainty about the future: on June 5th, 2022, President Biden announced a 2-year tariff exemption for solar panels produced in Southeast Asia. Biden’s action has helped ease companies’ concerns about having to hold billions of dollars in reserves to pay potential tariffs, and solar customers are hoping that panel prices will drop. Find out what these tariffs mean, and how the new exemption could impact your solar power installation.
The Tariffs
In 2011, the US accused China of “dumping” cheap solar panels on the US market, hurting US manufacturers who simply couldn’t compete with panels being sold below-cost. So, to help even things out, the US imposed tariffs on Chinese-made solar panels – some tariffs were as much as 250%.
The Investigation
As we mentioned above, there has been a months-long investigation into whether importers of solar panels from Cambodia, Malaysia, Thailand, and Vietnam are circumventing these tariffs on panels made in China. A small, California-based solar panel manufacturer has claimed that their competitors in Southeast Asia have been assembling solar panels in those countries using parts made in China, leading to a US Department of Commerce investigation.
The investigation froze imports, and stalled many large solar projects in the US, threatening the entire solar industry. Many worried that there could even be retroactive tariffs applied to imported solar panels, which would affect half of the solar panels in the US. The Solar Energy Industries Association (SEIA) estimated a 19% decline in near-term solar projects after the investigation was announced.
If companies are affected by these tariffs, they will raise prices on panels, which will trickle down to customers. There will then most likely be less demand for solar panels among residential customers, businesses, and organizations creating large-scale installations.
The Exemption
If the investigations find that the Southeast Asian manufacturers have been illegally getting around the tariffs, the US could levy a 50-250% tariff on the solar panels they export to the US.
But the Biden Administration sees giving “consumers access to cost-cutting clean energy options” as a top priority, according to the White House, and has decided the best course of action is to temporarily waive tariffs on solar panels imported to the United States from Cambodia, Malaysia, Thailand, and Vietnam. So as of now, Biden’s tariff exemption means there will be no additional tariffs on panels imported from countries that are being investigated for at least two years.
How Will This Affect You?
Biden’s tariff exemptions will help keep the cost of solar panels down – for now. But that doesn’t mean that prices will not increase weeks or months from now if something changes. As of now, if the manufacturers being investigated are found to have not done anything wrong, prices will remain steady. But if they are found to have been circumventing these tariffs, the cost of solar panels will increase after the tariffs are put back in place, although no one is sure by how much exactly.
Now Is the Best Time to Install Solar Panels
With the threat of tariffs being imposed on solar panels, now is a better time than ever to install a solar panel system in your home or business. You will also be able to take advantage of the solar investment tax credit, which is still at 26%. Starting in 2023, though, it will drop to 22%, and then it will disappear for homeowners in 2024 and drop to 10% for business owners.
Have questions? Go Solar Energy can help! Our agents are highly trained and knowledgeable in the solar industry and can assist you with any questions you have. If you are interested in installing a solar energy system in your home or business, we can compare quotes from the top-rated companies in your area and find you the best plan with the most efficient solar panels – and we’ll save you money. Get started by entering your zip code in the bar on our homepage, or for free quotes and guidance from one of our licensed agents, call 888-290-3112.