By Frank Andorka, Senior Correspondent
The law of unintended consequences keeps traipsing through the solar industry.
As broader tariffs begin to kick in on products ranging from solar modules to electronics equipment, the real-world consequences are beginning to interfere with product launches like Huawei’s launch of a low-cost residential solar inverter.
Huawei had been predicting its inverter would knock $100 to $200 off the typical price of a residential inverter, allowing it to compete with more well-known inverter companies. Instead, a 25% tariff on Chinese electronic equipment is going to completely wipe out that advantage and is already interfering in conversations with potential distributors.
Reuters explains Huawei’s dilemma:
Huawei will either have to reduce its margins or raise prices, they said, potentially benefiting rival producers including SolarEdge and Enphase Energy, which are ramping up manufacturing outside China.
The problem for Huawei is not unique to them, nor is it unexpected. When you start trade wars with countries without a coherent strategy (other than to punish countries you perceive to have “cheated” you), there are going to be unanticipated consequences. In this case, you’re hurting the residential solar industry by taking away a potential cost-saving piece of equipment that could have helped push residential solar sales higher.
Another analyst told Reuters:
A 25 percent tariff could eat up the margins of cost-competitive Chinese manufacturers and potentially change the player landscape of the U.S. solar inverter market.
Herein lies the central problem, however: Damaging Huawei’s product launch and keeping their technology out of the hands of U.S. consumers doesn’t accomplish the alleged goals of the tariffs, which is bringing well-paying jobs to U.S. citizens. The competitors of Huawei aren’t opening factories in the United States; their manufacturing facilities are outside the United States, too – they just don’t happen to be in the sanctioned country. So in essence, you’re doing exactly what you say government shouldn’t do – you’re interfering with the free market and picking winners and losers. And the U.S. consumer, unfortunately, is one of the biggest losers in this case.
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U.S. tariffs cast a cloud over Huawei’s solar electronics launch