Keeping with his “America First” policy, President Trump announced two weeks ago that the United States is imposing a 30 percent tax on imported solar panels, as stated by the Solar Energy Industries Association (SEIA). The idea behind this move was to create jobs in the solar panel manufacturing industry.
However, what President Trump is failing to recognize is that putting a tariff on these imports can not only kill more jobs than it creates, but can have a direct financial impact on citizens of Hawaiʻi.
Impact on the industry
The manufacturing sector houses 12.4 million jobs (according to data from the Pew Research Center in June of 2017). The portion of the industry that focuses on solar panel installation and farming added $84 billion to the U.S. GDP in 2016, according to the Solar Foundation. However, 80 percent of solar panels that the contemporary section of the industry tend to use are imported from China.
This means that there will be a price hike in a product that was claimed to be too expensive, resulting in not only decreased interest throughout the country, but over 23,000 jobs being lost within the installation industry, according to the SEIA.
Impact on Hawai‘i
The people of Hawaiʻi on average pay more for electricity than any state in the U.S. To combat this, people in Hawai‘i are starting to switch to solar energy.
These tariffs could sway local residents from installing solarpanels. In addition to the higher prices of the solar panels, the decrease in jobs within the industry will increase the installation prices. This will also lead many people to continue using sources of energy that are harmful to the environment, like coal, oil and natural gas.
A better proposal
If the goal of this tariff is to help the solar panel manufacturing industry in America, instead of punishing the installation sector for buying imported solar panels, make an incentive for buying American-made versions. Giving a tax break to those who buy within our country could increase demand enough to result in expansion of the domestic solar panel sector and decrease dependency on foreign products.