Of Solar Tariffs and Carbon Taxes

by Rob Roper

Yesterday (Thursday, January 25), it was a piece of rich irony that during a Vermont Climate Caucus meeting dedicated to discussing and promoting the ESSEX Carbon Tax plan one legislator, Brian Cina (P-Burlington), raised an off-topic concern about President Trump’s tariff on solar panels. After all, what’s the difference between a tariff and a tax? Oh, how these folks’ opinions change and how their understanding of basic economic principles sharpens when government brings its ugly hammer down on them!

For example, in promoting the Carbon Tax, proponents constantly point out that Vermont does not drill or frack for fossil fuels, so when we buy these products we send the money out of state. They are totally unconcerned, however, that 95% of solar panels are manufactured outside of the country. This tariff is designed to spur local manufacturing of solar panels, just like the Carbon Tax is supposed to spur local manufacture of electricity! So, isn’t that great?

No, in this case the advocates seem to understand that it’s better economics to import products from people who can more efficiently and cheaply produce them. And, renewable-based businesses are preparing to avoid the tariff by stockpiling cheap solar panels now — just as consumers will go to great lengths to avoid the Carbon Tax should it pass.

Renewable energy advocates understand that a 30% tariff on solar panels will cause an “unnecessary” economic hit. Ralph Meima, director of project development at Green Lantern Capital is quoted by the Brattleboro Reformer: as worrying, “… it may have a chilling effect on solar employment and investment.”

Of course, it will. And so will a Carbon Tax unnecessarily cause a chilling effect on employment and investment in companies/jobs that rely on gasoline, diesel, heating oil, etc. – which is most of them!

Yes, placing a tariff on solar panels is a stupid, damaging economic policy. Every bit as stupid and economically damaging as passing a Carbon Tax on Vermonters. But, as Mr. Meima observed, “I think the Trump administration is looking at this in terms of optics and his base, not in terms of sound economics.” The same is true of our Carbon Tax warriors.

Rob Roper is president of the Ethan Allen Institute.

{ 4 comments… read them below or add one }

Tom January 26, 2018 at 11:01 pm

love in it

Reply

forbes morrell January 27, 2018 at 1:52 am

Heating my home or getting to work leaves me with no options but solar does..

Reply

William Hays January 28, 2018 at 11:36 pm

Did you buy some electric (Made in China) brooms, Forbes?

Reply

Willem Post February 1, 2018 at 12:51 pm

Rob,
100% of our vehicles are imported from out of state and from abroad.
Almost all of our food is imported from out of state
Almost all of our clothes are imported from out of state and abroad
Almost all solar panels and inverters are imported from abroad
Almost all wind turbines are imported from out of state or abroad.

If all of New England closed down its nuclear, coal, oil and gas plants, and replaced that electricity with mostly wind and solar, and increased refuse burning, and a minor increase in hydro, and a doubling of imports via external ties, about 5 TWh of storage would be required to cover seasonal variations and wind and solar lulls.
Thé storage turnkey capital cost would be $1250 BILLION DOLLARS, at $250/kWh of delivered AC

Thé 100% RE folks, who likely have near zero experience designing energy systems, are totally living in a dream world, a LaLaLand.

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