Biden Imposes Higher Tariffs on Chinese Solar Panels
We bet you never considered tariff wars with China while looking for a solar panel installer. That’s the reality of the American economy – most of the stuff comes to us from overseas. And some stuff is coming to us in very dangerous quantities, making our national security dependent on a single supplier. It’s like having a single gas station in the village, and one day, the owner starts playing with prices, endangering the basic life of the inhabitants. Yep, you better have a second gas station with a different owner.
It’s almost the same with the solar panel market. When trying to find the best solar panel companies, you always want to have multiple choices. If you are currently searching for one, SolarPowerSystems allows you to compare solar quotes simply by answering a few questions.
Why the Rise of the Tariffs?
The White House said, “ President Biden is directing his Trade Representative to increase tariffs under Section 301 of the Trade Act of 1974 on $18 billion of imports from China to protect American workers and businesses.” In other words, there will be a tariff increase on solar cells (whether or not assembled into modules) from 25% to 50% in 2024 and on lithium-ion non-EV batteries from 7.5% to 25% in 2026.
President Joe Biden announces plans to impose major new tariffs in the Rose Garden of the White House in Washington, Tuesday, May 14, 2024
No, it does not mean that all solar panels will become 50% more expensive, and home batteries will cost a fortune by 2026. Keep calm and read.
This tariff rise was not a sudden act. The US solar panel industry has been lobbying for a tariff rise since last year. Also, China is not the only importer of solar panels to the US. India and Southeast Asian countries have a big cut on the US market (although it is hard to identify whether Chinese companies found the producers).
How will that impact the regular US residents who use or plan to use solar energy for their household needs?
First, those already installed solar panels may not worry about anything before the 20-25 years warranties expire. We cannot predict whether these manufacturers will exist and whether you will have to buy new solar panels. Or there will be a marketing campaign by one of the US panel manufacturers so you can install new solar panels with better energy output. Keep enjoying your reduced utility bills and count the money you have saved. (and invest them in the US domestic solar panel producers).
What about those planning to go solar and send out the solar quotes? Or those who have signed the contract but have not yet installed and launched the solar panel system? No worries. We have decided to walk you through several scenarios so that you can better understand what will happen on the market and how it might influence your pocket.
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What to Expect with Solar Panel Prices?
Here are two simple predictions of what will happen in the upcoming years.
Short Run (1-2 Years)
The cost of solar panels will slightly increase because US producers won’t install new production lines, even with the additional financial boosts from the investors (although, as we mentioned earlier, talks about this tariff raise have been in the air since 2023).
On the one hand, last year, the U.S. produced just seven gigawatts of solar modules but installed 32 gigawatts. The difference was imported.
On the other hand, the U.S. imported 69 gigawatts of solar panels in 2023 and the first quarter of 2024. That should be enough for 2024 and partially for 2025. However, whether the market will have enough solar panels for 2026 is unclear.
So, it is obvious that between the second half of 2025 and the middle of 2026, there will be a gap in the supply of solar panels, which will influence the prices.
However, sneaky installers might artificially create panic and persuade those who planned to install the solar panels to “use the last chance before the prices go up.” No, don’t buy it.
Small solar panel installers might be forced to leave the market because the big installers will buy all the solar panel stocks before the domestic producers start production.
Here is the reason not to worry about the supply gap and price rise. We still have federal and local state incentive programs that subsidies solar panel installations or deduct the cost of going solar from your taxes.
Solar panels are built at the QCells solar energy manufacturing factory in Dalton, Georgia, U.S
Long Run (3-5 Years)
As the White House has stated, “solar manufacturers have already announced nearly $17 billion in planned investment under his Administration—an 8-fold increase in U.S. manufacturing capacity, enough to supply panels for millions of homes each year by 2030”.
There is a difference between “announced investment” and “productions launched.” But even if half of this investment will be turned into actual factories and jobs, the US market will be packed with domestically produced solar panels and imported ones from Europe and India. And what does a big supply of anything do? Right, it pushes the prices down.
So, what is the plan for the residents?
First of all, do not panic and do not get emotional.
Those who plan to install solar panels but have not picked the right installer yet, stay calm. The wealth of information about solar installers doesn’t always simplify the decision-making process.
With numerous technicalities involved, much of the information provided by installers themselves is often unverified in user reviews, and pricing policies can be misleading. SolarPowerSystems has developed a solar installer search tool that generates a list of optimal installers in your area. This tool uses the largest installer review dataset, which our professionals constantly update and verify. Simply answer a few questions, and our competent team member will assist you free of charge!
For those who have signed the solar panel contract already, find it and read it again. Ensure no paragraphs allow the installer to change the contract price during the installation and launch. Call the company and ask whether they plan to do so. A good, reputed company will come to you first with good or bad news. Even if they plan to raise the price, do not panic; try to negotiate.
Small local installers especially have their fears of becoming bankrupt and problems to worry about (i.e., keeping people employed and busy).
In the long run, residents don’t have to worry about future prices for solar panels. The expected competition between American producers will also push research and development projects to make solar panels cheaper and more energy-efficient.
Energy Storage
Here is a different issue. The US is not known for producing batteries but is a top consumer. That was one of the reasons for imposing the tariffs – to end the dependence of the US from external supplies. Even before the tariffs rise, in November 2023, the U.S. Department of Energy (DOE), under the Administration, announced the investment of $3.5 billion to boost the domestic production capacity of advanced materials and batteries. The reason is clear: “This will minimize the country’s dependency on critical battery raw minerals, technologies, and components from foreign entities of concern.”
The tariffs on batteries will start working in 2026. Two years from now might be enough to adapt the economy and build production facilities. Again, there is a difference between “announced investment” and “productions launched”.
The prices of home energy storage batteries will stay the same by the end of 2024: the market is filled with them. However, since 2025, there will be some market shakes because the deadline for the tariffs is approaching, and whether the US market will be filled with domestic or non-China batteries is unknown.
Therefore, we advise buying a good home battery from an American or non-Chinese producer. That will help you save some money on the bills (fill the batteries at night and use them during the day for most energy-demanding devices) and prepare yourself for solar panel installation in the future.
Inside Tesla battery factory in Nevada
What’s Overall?
To sum up, do not panic. Install solar panels if you plan to, buy home energy storage in 2024, keep calm, and buy products “Made in the USA.”
And keep in mind Biden’s words about the reasons for imposing the tariffs: “American workers can outwork and outcompete anyone as long as the competition is fair. But for too long, it hasn’t been fair. For years, the Chinese government has poured state money into Chinese companies … it’s not competition, it’s cheating.”
That’s how America was built – with fair rules that are equal for everyone.
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Andriy Ryzhyy is a Research Expert and Copywriter at Solar Power Systems. Andriy’s experience in digital marketing automation and renewable energy sources, passion for applying mathematical principles to real-life tasks, and devotion to developing eco-friendly energy resources—a commitment shared with the rest of the team—are crucial in shaping the company’s strategy for presenting accurate and user-friendly information on solar technology.
