New fees may be coming to solar panels. How will that affect us and you?
At the end of last month the US Trade Representative announced that the United States would begin imposing duties of up to 30 percent on solar panels and other equipment produced outside the country. Interestingly, the tariff will also apply to washing machines made outside of the United States, in an attempt to provide more manufacturing jobs for US workers. So why are we at SparkFun talking about this? We sell quite a few solar panels in a year – 4,239 of them in 2017 alone (not to mention all the ones we have on our roof). Our main goal today is to explain how this could affect us - and you - when the new duties are introduced, rather than debate whether increasing tariffs is a good idea or diving too deep into “dumping” terminology.
Look at all of those shiny panels on our roof!
Before we get into what these new rules may entail, let’s go over what tariffs (or duties) actually are. To put it plainly, tariffs are the taxes and fees on imports or exports between different nations. Every item needs a goods classification and is assigned an HTS, or “Harmonized Tariff Schedule” code, which dictates how much that item is taxed; this is known as its customs duty, and is calculated based on the product’s assessable value. Tariffs can actually be a very good thing, as they protect industries and workers in their own nations.
The average tariff rates in the United States. Graph courtesy of the United States International Trade Commission
We started hearing rumors about this from a few of our suppliers back in early December, but didn’t have any concrete information on how much the tariff increase could be or when it would go into effect. Now we have a better idea and unfortunately, it seems that at the very least, we’ll be affected by new tariffs set on solar panel imports. The 30 percent duty will apply to solar panel sales after an annual total of 2.5GW is reached (there is no increased tariff before the 2.5GW mark). SparkFun sold 4,239 individual solar panels last year over five different SKUs; after doing a bit of math, that equates out to about 6.07kW total in 2017, and if sales prove to be as good this year we shouldn’t hit that 2.5GW mark. Our suppliers, on the other hand, may not be as lucky.
Two versions of the solar panels we carry.
We still don’t have a date when these changes are supposed to be implemented. Additionally, we are in constant contact with our suppliers, one of which is a US-based company that predominately purchases from SolarWorld, one of the American companies requesting these tariff changes. We have been warned that with our supplier’s increasing costs, they will need to pass some of that onto their customers (including us), but until we have a definitive date for these changes we will continue with the status quo.
That’s all the information we have for now, but as we find out more we will share it. Hopefully this will shed a little bit of light onto what is happening behind the scenes here at SparkFun HQ!