Solar Modules Tariff

We have received a few questions lately about the increasing prices of solar modules, and what specifically about the “tariff” is causing it.  I decided to take a couple minutes to talk through it, which may be worthwhile to sum to gain a basic understanding of what is currently going on in the module marketplace.

A good article describing this phenomenon is on slate.com, although now a bit outdated.

To summarize, the strength of the US solar market over the past decade was largely driven by the new lower cost modules from China.  Basically, these new lower cost modules brought the system prices down to a point where the ROI and breakeven point was viable in certain regions in the US.  Thus, this drove the spiking market and employment of over 140,000 (per slate.com) American workers.  All good, right?  Well, yes, except for the local panel companies.

Due to what I would guess is higher labor costs, the US module companies have lots of trouble competing on price.  The initial solution was the US Commerce Department imposing a ~30% tariff on Chinese panels.  However, a quick switch to partial Taiwanese production got around the tariff, and got the Chinese companies back on the market in the US.

This time, the new tariff includes all Chinese panels made in Taiwan.  The immediate impact was increased pricing and drying-up of inventory on Taiwanese produced panels.  At this point, the American companies are pretty much the only game in town, thus the higher pricing.  While I won’t jump into “right and wrong” here, as we are partners of companies on each side of the fence, I will say that this could be really bad for the growth of the solar market.  Without the cheaper modules, and without competition from outside of the US on pricing, we may set the market back a few years.

We currently do not have pricing on our solar modules at http://tandem-solar-systems.com/, as we are waiting to see how this situation develops.  We are hearing that the Chinese module companies are aiming to come back online in Q3 once they understand what is going on in the market.  Until then, we have the US made solar modules to choose from, at a significantly higher price than the past Taiwanese solar modules.  Let’s hope that our industry can duck the challenge and keep the growth strong and positive.

Please visit our module page for more information, and feel free to contact us at any time.

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