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 new tariffs imposed this year.
The solar industry is like America itself: 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 over year. I’m unfazed by the new tariff being imposed on imported solar cells and 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.
Because 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, who will find a way to prevail despite the International Trade Commission’s intervention.
In hopes of helping other solar 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.
Although America imports roughly 80 percent of its solar cells, making these new tariffs loom large, there are upsides to the decision when we unpack the legislation piece by piece.
The 30 percent tariff issued is far less than the 50 percent tariff advocated by Suniva and SolarWorld, the two companies that petitioned the International Trade Commission to create the tariffs.
Although 30 percent 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 they will do so only for several years, at declining intervals of tariff percentages.
Rather, the majority of costs go toward customer acquisition. The cost of American solar business will only go up by 10 percent 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 percentage point increments.
This means that, by 2022, the tariff will only be 15 percent, bringing the actual cost of operating an American solar business to a net price increase of roughly 4 percent in the fourth and final year of the tariff, making the hit entirely surmountable.
Then the tariff goes away completely.
The payoff on rooftop solar 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.
This positive impact will only be magnified by reducing the amount of negative lead generation practices many solar companies engage in, from harassing homeowners who never expressed interest in solar to selling solar leads they know have no value.
Essentially, the tariff won’t get in the way of creative financing options for solar prospects and solar companies alike.
Simply put, when major trade decisions that impact an entire industry are set forth by a select few and intended to benefit only a select few, the market will correct these small players’ mistakes, even if many fear the mistakes to be incorrigible.
Once the tariff has ended, we will be able to laugh at the fear it once caused our industry in our turn.
Scott Cramer is the CEO of Go Solar Group, one of the main solar companies in Utah.