At the beginning of 2018, the United States government enacted a tariff on imported solar panels. Essentially, most companies that imported more than 2.5 gigawatts’ worth of crystalline silicon solar cells and solar modules would have to pay a 30% tax on the equipment.
While the cost of solar power has continued to get cheaper, these tariffs have created a great deal of hardship within the industry. SunPower, one of the largest solar cell manufacturers in the country, estimated that the tariff has been costing them $1.5 million to $2 million per week. This was despite the fact that the tariff granted exemptions for solar equipment imported from certain countries. Most such equipment is made in China, Mexico, and the Philippines, all of which are impacted by the tariffs.
But in September 2018, the United States granted SunPower and other manufacturers tariff exclusions on certain types of solar products.
Beginning on September 19, 2018, the U.S. Trade Representative—the agency responsible for developing and recommending trade policy for the United States—announced that some products would be exempted from the import tariffs. Among the residential and commercial scale solar products granted tariff exemptions are:
- 10 to 60-watt rectangular solar panels of certain sizes
- Portable and off-grid crystalline silicon photovoltaic (CSPV) cells
- Solar panels producing less than 27.1 watts, measuring less than 3,000 square centimeters, and meeting certain other requirements
The media has noted that of the various manufacturers operating in the United States, SunPower, which manufactures and assembles its modules in the Philippines and Mexico, benefits significantly from this development. SunPower itself acknowledged the benefits of these exemptions, as they will apply to the back-contact solar cells and panels the company makes.
While SunPower was seriously impacted by the tariffs, its efforts this year have led to benefits from the new tariff exclusions.
SunPower has been making significant efforts to mitigate the effects of the tariffs. Some industry outlets have noted that the company had been hard hit by the trade policy, with one stating, “SunPower stands out within the solar industry… as a company damaged by the administration’s [original tariff] policy.”
While many solar manufacturers have relocated overseas in recent years, SunPower has been continuously headquartered in San Jose, California since 1985. Today, it’s one of the largest American solar power companies. The company employs more than 17,500 workers located in 40 states, and supports more than 500 dealers across the country. It is also one of the very few solar companies that does not import components from China, a prime target for import tariffs.
In addition, in 2017 alone SunPower spent more than $120 million on American R&D endeavors, with the aim of enhancing the productivity, efficiency, and reliability of its panels. In 2018, SunPower sought to extend its American investments by acquiring SolarWorld Americas, making SunPower one of the largest U.S. manufacturers of solar components.
The newly announced exclusions are good news, as is increased investment in American manufacturing capabilities. The exclusions will allow SunPower to continue to offer their products at competitive prices. But the remaining tariffs will continue to impact many manufacturers and products. We will keep you up to date on ongoing developments in the solar power industry, and their impact on homeowners and business owners like you.