# Solar CEO on Why Relying on Imports is “Unfazed by the New Tariff”

- Link: https://greenlivingguy.com/2018/02/solar-ceo-on-why-relying-on-imports-is-unfazed-by-the-new-tariff/
- Published: 2018-02-13T04:38:37-05:00
- Author: greenlivingguy

#### By Scott Cramer

As the CEO of a small solar company relying on foreign imports, what I know to be
true of our country and the industry in which I work casts a shadow on any frustration
I’m supposed to have over the 201 Trade Case decision.

![Solar panels](https://i0.wp.com/greenlivingguy.com/wp-content/uploads/2018/09/
sungrow-emea-ceTSHQ0qars-unsplash.jpg?resize=420%2C280&quality=52&ssl=1 "sungrow-
emea-ceTSHQ0qars-unsplash - The Green Living Guy")

The solar industry is like America itself: Full of good intentions, strong, enduring,
resilient, and willing to fight to improve not just the human condition, but also
the most sacred place in our nation’s psyche – the sole item preceding the white
picket fence in the last and greatest components of the American Dream – our homes–
which are now powered by solar in larger numbers than ever.

 

That trend will still continue year after year. I’m unfazed by the new tariff. I
feel many American solar companies relying on foreign imports have reason to feel
the same. It’s why logic tells me to ignore the cloudy, alarmist and overwhelmingly
negative reactions to the ruling of the tariff. No matter what solar legislation
is written into law, it can’t achieve its intentions if they differ from the will
of the overwhelming majority. Moreover, who will find a way to prevail despite the
International Trade Commission’s intervention.

![Solar Energy Isn’t Always as Green as You Think](https://i0.wp.com/greenlivingguy.
com/wp-content/uploads/2015/03/wpid-wp-1425254270620.jpeg?w=780&quality=52&ssl=1)

Written into law by three entities, all of them at some point having filed for bankruptcy,(
President [Trump](https://greenlivingguy.com/2017/10/trumps-solar-tariff-confusion-creates-an-opportunity/),
Suniva, and SolarWorld), the 1974 Trade Act cannot harm the long-term future of 
275,000 people employed in the thriving American solar industry because the overwhelming
majority will find creative workarounds that spawn the innovation and resourcefulness
our industry needs to secure its foothold in the future of renewable energy.

In hopes of helping other [solar](https://greenlivingguy.com/2023/08/unveiling-the-findings-of-the-solar-tariff-investigation/)
executives understand the opportunity to grow and prosper in spite of the tariff,
I’ve outlined the below principles we must follow and remember if we are to move
forward in the way I know we can.

## **Unpacking the 201 Trade Case**

**_The first 2.5 gigawatts of foreign-imported solar cells will be excluded from
the tariff_**, giving unprepared companies relying on foreign imported solar cells
more breathing room than expected. Let me give you an idea of how much 2.5 gigawatts
actually is. It’s roughly 5 percent of all solar modules installed in America in
the third quarter of 2017; a significant figure to say the least.

Although America imports roughly 80 percent of its solar cells, making the [201 Trade Case Tariff](https://web.archive.org/web/20180121114018/https://www.seia.org/initiatives/solar-section-201-case-frequently-asked-questions)
decision loom large, there are upsides to the decision when we unpack the legislation
piece by piece.

The 30% tariff issued is far less than the 50% tariff advocated by Suniva and [SolarWorld](https://greenlivingguy.com/2018/10/sunpower-begins-a-new-chapter-in-american-solar-manufacturing/).
The two companies who petitioned the International Trade Commission to create tariffs.
Although 30% seems like a lot, the bulk of American solar companies’ costs aren’t
in panel imports. The bulk of most solar companies’ costs don’t stem from the cost
of the solar panels themselves. Which is what the tariff will impact, and only for
several years at declining intervals of tariff percentages.

Rather, the majority of costs go toward customer acquisition. After assessment software,
staffing, lead generation, sales processes, and operational costs are factored into
the average solar company’s expenditures, **the cost of American solar business 
will only go up by 10% in result of the tariffs**, and only for the first year the
tariff is imposed.

The tariff will be reduced each year over the span of four years, and in five percent
increments. This means that by 2022, the tariff will only be 15 percent. That brings
the actual cost of operating an American solar business to a net price increase 
of roughly 4%. That’s in the fourth and final year of the tariff, making the hit
entirely surmountable.

Then the tariff goes away completely.

## **The Tariff Will Reveal Which Solar Companies Can be Trusted to Invest in the Customer Experience**

The [payoff on rooftop solar](https://gosolargroup.com/utah-residential-solar-panels/)
takes years for customers to receive and sometimes decades to magnify, so it’s imperative
consumers invest their hard-earned money in solar companies that are profitable 
enough to maintain a positive customer experience.

The tariff will only cause job losses and cut corners in the customer experience
for solar companies. Especially for those that have over-leveraged themselves with
debt. Moreover, consumers will be less overwhelmed by the options made available
to them. Therefore, they’re more likely to have an easier time picking from a smaller
bucket of players. All of whom being companies capable of doing right by the customer.

This positive impact will only be magnified by reducing the amount of negative lead
generation practices many solar companies engage in. For instance, harassing homeowners
who never expressed interest in solar to selling solar leads they know have no value.

![](https://i0.wp.com/greenlivingguy.com/wp-content/uploads/2014/09/img_1495-0.jpg?
w=780&quality=52&ssl=1)

## **The Logistics of the Tariff Are Mathematically Manageable**

Given the 2.5-gigawatt installation threshold before the tariff took effect, financially
stable solar companies had plenty of time to import a large number of panels to 
offset the effect of the impending tariff, and this was the case prior to Trump’s
January announcement of the actual tariff logistics.

It becomes easy to point a finger at the government when a trade case doesn’t ‘weigh
in our favor.’ However, we must remember that the government has also done a lot
to help residential solar, from federal to state tax incentives.

I believe in a free marketplace. However, America isn’t and never has been the purely
capitalistic economy most citizens perceive it to be. Even Adam Smith’s ‘Invisible
Hand’ is a byproduct of State Capitalism (our current economic model). It has given
us a Central Bank to control interest rates. Moreover, a White House for passing
legislation, and tax codes for Federal resource allocation.

Although tariffs tend to have unintended consequences, if the 201 Trade Case tariffs
achieve their results, Suniva, SolarWorld, and other companies who felt hamstrung
by the low cost of foreign-imported residential solar cells over the past decade
will be back in the ring as competitors. They can create more competition and, therefore,
innovation. While that may not mean immediate return for American solar companies
who’ve relied on foreign imports, it means a better outcome for solar prospects,
which should be the objective of every American solar business.

## Solar Affordability

Additionally, the 201 Trade Case tariff will bring solar companies closer to forecasting
how price changes affect the real consumer demand for solar panels. It’s the step
the American solar industry must be able to make within the next five years. Moreover,
that’s if it’s going to bring solutions to consumers at the appropriate price without
federal and statewide incentives.

These incentives aren’t in immediate threat of disappearing. However, it won’t hurt
our industry to learn how we can function without them. Subjecting our rooftop solar
industry to a natural and domestic pricing environment will make this possible.

This becomes increasingly true if the future bodes toward fewer solar tax credits
and rebates. However, even if fewer tax credits and rebates for residential solar
become a reality, solar company technology and innovation may be able to outpace
the resulting hike in solar cell prices.

## **A Proportional Scale Back on Chinese Imported Solar Cells Means Greater Quality for Solar Prospects**

Over the past decade, many American solar companies, at the expense of their customers,
rely heavily on the cheapest solar panel prices. That’s from China to sustain their
deeply-leveraged, debt-laden business models.

Trump’s blue-collar presidential campaign heavily targeted fair trade deals. That’s
in addition to bringing the American manufacturing business back to life through
economically protectionist measures. Not to mention the recent trade case decision
is consistent with those campaign tactics.

Some even say the 201 Trade Case decision is the result of Trump’s tenuous personal
relationship with China. Moreover, as the most prolific solar panel manufacturer
in the world, is less than thrilled with the tariff. Despite China taking a harder
hit than any other country because of the tariff, JinkoSolar, a Chinese solar panel
manufacturing company, has plans to build a solar factory in Florida.

An overwhelming majority (three-fifths) of America’s foreign-imported solar cells
used to come from China. Namely because of the country’s subsidization of the product.
Also, consumers’ lack of education on differing levels of solar panel quality. It
has skewed the demand for Chinese imported solar panels in China’s favor.

Roughly 10% of all American-imported solar cells came from China prior to the tariff.
That’s still a hefty percentage of American solar relying on a Chinese product. 
Although they have low prices and offer its own unique benefits, it does not expose
consumers. That’s to the full spread of solar panel features the American market
is missing out on.

Yes, a tariff on solar panels from China will increase prices. However, it will 
also direct American solar companies and their prospects toward higher-quality solar
panels. Therefore, a better customer experience along with larger investments in
driving down costs for high-quality solar panels.

## **Homeowners Will Still be Able to Go Solar for Zero Down**

No cost solar in America is a major misconception. That’s because the phrase is 
really meant to express that prospects can go solar for zero down. Although, convenient,
it isn’t going solar for free. There may be a day when that happens, but it is far
off in the future – tariffs or not. And, although solar isn’t free, neither is any
good investment. Dispersing the cost of a solar panel system over a longer loan 
length may increase the price of going solar. However, it will reduce the intensity
of the cost increases.

Essentially, the tariff won’t get in the way of creative financing options for solar
prospects and solar companies alike.

However, don’t let the cost of residential solar compel you to 1) embark on a DIY
solar project (which is a big no-no for every one). or 2) keep you from benefiting
from the [ROI of residential solar](https://gosolargroup.com/solar-panels-amazing-roi/).
Solar should never be viewed as an up-front expense but rather as an investment.

Simply put, the market will correct these small players’ mistakes, even if many 
fear the mistakes to be incorrigible. And that’s when major trade decisions that
impact an entire industry are set forth by a select few and intended to benefit 
only a select few

Once the tariff ends, we will be able to laugh at the fear it brought to our industry.

Scott Cramer is the CEO, of Go Solar Group, [One of the best solar panel companies in Utah and Reno, Nevada. ](https://gosolargroup.com/)

![author avatar](https://secure.gravatar.com/avatar/df91669667126e1290c21ee0342c386e2da19d588d4d9ca6560bd82ed59a9641?
s=300&d=monsterid&r=g)

 greenlivingguy

 The Green Living Guy, Seth Leitman is an independent power producer, a green living
expert, and Editor of the McGraw-Hill, TAB Green Guru Guides. Seth is also an Author,
Radio Host, Reporter, Writer and an Environmental Consultant on green living. The
Green Living Guy writes about green living, green lighting, the green guru guides
and more. Seth's books range from: # Build Your Own Electric Vehicle by Bob Brant
and Seth Leitman (2nd and 3rd editions) # Build Your Own Plug-in Hybrid Electric
Vehicle by Seth Leitman # Build Your Own Electric Motorcycle by Carl Vogel # Green
Lighting by Seth Leitman, Brian Clark Howard and Bill Brinsky # Solar Power For 
Your Home by David Findley # Renewable Energies For Your Home by Russel Gehrke #
Do-it-Yourself Home Energy Audits by David Findley # Build Your Own Small Wind Power
System by Brian Clark Howard and Kevin Shea # and more green living books to follow.

 [See Full Bio](https://greenlivingguy.com/author/greenlivingguy/) [  ](https://greenlivingguy.com/author/greenlivingguy/)