Originally posted by Unregistered
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A tariff is simply a tax on imports or exports. There are two types of tariffs, those which are calculated as a fixed percentage on the item and those that are calculated as a fixed dollar amount.
Trump’s tariff imposes a 30% tax on imported panels in year 1, which is actually preferable to a fixed dollar amount if you’re thinking about going solar. Because the tariff is percentage-based, its actual impact on prices will shrink each year as the price of imported solar panels continues to fall.
Due to advances in solar manufacturing, the cost of solar panels has fallen by between 2% and 6% per year for the past several years. In China, South Korea, and other countries that dominate solar panel manufacturing, falling costs and technological advances won’t slow down simply because there is a U.S. tariff – and in fact, the tariff may give them an incentive to decrease costs faster.
The end result is that the percentage-based tariff, which is already set to fall each year, will be even smaller because it will be applied to ever-decreasing module costs. An example of this trend is illustrated below, where the dollar amounts shown are in dollars per watt of solar energy.
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