If your U.S.-based roofing company imports solar panels from outside the country, your cost of materials could increase to the tune of 10 to 35%. Foreign solar panel production has caught the attention of U.S. government officials who are deciding on possible trade restrictions.
As any business owner knows, when your cost of materials rises, it can mean a big bite out of profits. Here’s some information to help you face this potential change head-on.
Three Proposed Tariff Options
As reported by Ars Technica, the ITC gave President Trump three recommendations representing aggressive, mid-range, and gradual options, as follows:
On the high end of the recommendations made by the ITC (PDF), the commission’s chairperson recommended a 35-percent tariff on all imported solar modules, as well as a four-year tariff of 30 percent on solar cell imports exceeding 0.5 gigawatts and a 10-percent tariff on cell imports under that limit. The tariffs would decline over the years.
The intermediate recommendation came from two ITC commissioners, who suggested a 30-percent tariff on modules and a 30 percent tariff on imported solar cells in excess of 1GW. Again, the tariff would decline after the first year.
The most relaxed recommendation came from one commissioner who recommended a four-year import quota system that allowed 8.9GW of solar modules and cells to be imported in the first year.
It’s unclear which option Trump will favor, though many feel his past policy may be an indicator that trade restrictions on solar are just a matter of time.
At Least Two Sides To the Solar Panel Trade Issue
Obviously, this is an issue that sparks differing opinions in the solar industry.
While limiting trade would mean higher prices on solar panels for those who were sourcing them internationally, some feel that trade restrictions are the way to saving not sinking the solar industry as a whole. Specifically, with current and future domestic solar jobs on the line, the United States International Trade Commission and others are looking at tariff or quota options.
But not everyone is on board with the prospect of these tariffs or quotas. These restrictions would serve as a hit to free trade, and some complain that this is going too far. Trade groups and others estimate that blocking free trade for solar could significantly reduce solar adoption throughout the country.
Others point out that these measures would actually help most solar companies in the long-run, as opposed to bailing out two domestic but foreign-stocked companies on the brink of bankruptcy: Suniva, Inc. and SolarWorld Americas.
What This Could Mean for Domestic Solar Jobs and Companies
Again, for those who support trade restrictions on solar, the conversation tends to circle back to jobs. Solar Energy Industries Association (SEIA) has estimated that as many as 80,000 solar jobs could be on the line.
For those working in U.S. roofing or solar industries, that really hits home.
Here is an interesting story from the Bay Area that puts all this in additional perspective, by highlighting what this could mean for specific businesses on a more local level:
President Trump decides on this possible tariff in the upcoming weeks (end of 2017 into early 2018). That means it’s now a waiting game for most solar installers.
Ramp Up While You Wait
Like Skytech mentioned in the KPIX Channel 5 video above, you can stockpile panels now if you have the means and storage space! But you could also start looking at something more foundational: how you’ll adapt your business model as a whole.
With source materials up in the air, it’s the perfect time to step back and re-evaluate all your business operations. You may need to act quickly once more information is released, to adapt or streamline where you can in order to make up for higher solar panel costs domestically.
This is where JobNimbus can become your solar ally. Our tools help roofing businesses initiate or strengthen best practices. From workflows to communication to reporting, most roofing businesses see positive growth from managing, automating, and syncing tasks more effectively. That’s what our roofing software can mean for your business, today and in the future.