David Robinson: Tesla seems unfazed by new tariffs on solar panels

The U.S. solar industry is in an uproar after the Trump administration slapped a tariff of up to 30 percent on solar cells and panels made outside the United States.

Tesla Inc., which is slowly building production with its partner, Panasonic, at a massive solar panel factory in South Buffalo, largely shrugged its shoulders at the new tariff.

"Tesla is committed to expanding its domestic manufacturing, including Gigafactory 2 in Buffalo, New York, regardless of the solar tariff decision," the company said in a statement.

Tesla had remained largely quiet in the solar panel tariff debate. Its Buffalo factory gives it a hedge against the new tariff because the company is building a source of domestic panel production that will allow it to avoid the new duties.

But the factory is only now beginning to make solar panels, and while the Buffalo gigafactory eventually should be able to meet much of Tesla's solar panel needs, it still will need to use imported panels as production ramps up, which will expose the company to the higher panel costs the rest of the industry now faces.

Other U.S. solar installers warned that the tariffs could deliver a serious blow to one of the nation's fast-growing sources of renewable energy. They warned that the tariffs, because they will make the solar panels that most installers use more expensive, could lead to fewer systems being put into service, leading to the loss of tens of thousands of jobs among solar panel installers.

The tariffs, targeted mainly toward manufacturers in China and the Far East that currently supply the bulk of the panels used in the United States, will start at 30 percent and decline to 15 percent over a four-year period. The first 2.5 gigawatts of imported solar cells are excluded from the tariff each year.

The Solar Energy Industries Association warned that the tariff would lead to the loss of roughly 23,000 jobs within the U.S. solar industry, mainly among installers, as the higher prices lead to the delay or cancellation of billions of dollars in solar energy projects. More than 260,000 U.S. workers are employed within the solar energy industry, the group said.

The tariffs, while applicable to all foreign producers, are mainly targeted at China, which has become a powerful player in the solar industry as its low-priced panels have become the dominant source for U.S. installers. China now makes 60 percent of the world's solar cells and 71 percent of its solar panels, according to the U.S. Trade Representative. In 2005, China's share of the global solar cell market was 7 percent.

There also was one nugget of good news in the tariff announcement. The 30 percent tariff is less than the 35 percent duty that the U.S. International Trade Commission recommended in October when it found that panel imports were hurting U.S. panel manufacturers.

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