7 ms·

Wait, so if i'm reading this right the process is: * parts can be imported tariff free into the US to be used to manufacturer cells * cells get exported back

Wait, so if i'm reading this right the process is: * parts can be imported tariff free into the US to be used to manufacturer cells * cells get exported back out to other countries (to enable the tariff free importing of the parts). * cells are then assembled into a final product over seas * the final product is imported tariff-free due to being manufactured in the US. Is that correct? Because if so that's hilarious and horrifying at the same time!

zaroth 7y ago
Seems like this is the tariffs doing exactly what they're supposed to do -- incentivize US domestic production. > Panasonic’s Canal said foreign solar panel manufacturers want the Buffalo plant’s cells because solar panels assembled abroad with American-made cells can be shipped to the United States tariff-free, according to U.S. trade rules implemented last fall. > Panasonic’s Buffalo operation is one of few U.S.-based solar cell producers because it is traditionally far cheaper to make the components in other countries, putting it in a unique position to serve the foreign demand. They would have to do the assembly into panels domestically as well if they didn't have the exemption due to the cells being US built.
- magduf 7y ago
  They're incentivizing domestic production, but at two costs: 1) environmental, from shipping stuff around the world several times (parts into the US to SolarCity, cells out of the US to final assemblers, assembled panels back into the US for final sale and use), and 2) cost to domestic purchasers. Finally there's 3) reduced demand for solar panels due to higher costs, which means we don't produce as much power this way, and instead use other means (generally fossil fuel). All in all, it's a terrible deal for us. If we're going to shoot ourselves in the foot on something made abroad, I propose we do it for smartphones. Slap a giant tariff on any cellphone made outside the US, like 1000%. Let's see how Americans like being stuck with their aging smartphones or having to spend $10k for a new one. Oh yeah, make sure the tariff applies to the LCD/OLED screens too, since we can't make those here.
  - icegreentea2 7y ago
    I think there's a fun angle we could take on this. One could reasonably argue that large solar deployment in major industrialize countries is unlikely to occur "in time" without some sort of government prodding (of some sort). And when that time comes, it's gonna be big. We're going to need crank out solar panels and wind turbines like mad. In that context, basically everything we've done so far is basically warm up. Like 2% of US electrical production is from solar. We're gonna need to install like 25-100x the current installation base to do what we want. A reasonable assumption to make is that by the time the USA gets around to doing that, most other rich countries will be doing that too. This means that global supply is going to be challenged. This means that having the domestic capacity to grow this production is key. This means that being somewhat inefficient at this stage to build knowledge-base and competency in key parts of the supply and operations chain may actually be the long-term optimal solution. Of course, this is all just conjecture.
    - zaroth 7y ago
      Look at “Swanson’s Law” for insight into solar economics. We’re at the order of magnitude where widespread deployment is inevitable. It took a lot of learning curve to get there, there’s barely another order of magnitude left to be had. There are also the supporting infrastructure that needed to get there, such as battery/storage tech and smarter grids to handle the variable load. Governments around the world have put hundreds of billions of dollars into solar R&D. Last year we had 500GW of solar and 600GW of wind, and added 100GW of solar. We should add more than 100GW of new generation to that this year. It’s pretty good progress! I think global generation is about 15TW, and of course solar doesn’t generate 24/7, so there’s plenty of room to grow.
  - zaroth 7y ago
    Just to put it in perspective, the 30% tariff on imported cells resulted in a net impact of about a 5% cost increase to the end consumer. [1] The basic macroeconomic equations always tilt to the side of free trade. I majored in economics. The basic theories work in an ideal and simplified world, and don't account for all the variables. The "hollowing out" of American manufacturing was a result of globalization spurred by free trade. Any government intervention which isn't a subsidy is going to be less than ideal theoretically, but in a geopolitical reality can still be the right choice. And to be sure, both the tax credit and net metering still provide a huge government subsidy for adding solar generation. [1] - https://news-media.energysage.com/wp-content/uploads/2018/05/Price_Impact_Solar_Tariff-1024x555.png https://news-media.energysage.com/wp-content/uploads/2018/05...
fjsolwmv 7y ago
Yes. Manufacture is a multi stage operation. Transportation costs (waste) is balanced against production cost at each stage. Tariffs are one (synthetic) aspect of production costs. This may be a hint that the tariff structure is inconsistent, or perhaps it working fine and transportation waste is an acceptable cost. One way to look at is that it's often cheaper to export inputs (cells) for foreign assemble and then reimport the outputs, even if tariffs are not a factor in the location of the inputs. I believe steel or aluminum or oil is similar in that taw materials are mined/extracted somewhere, sent elsewhere for processing, and then finished products sent back. You yourself might have once sent a piece of equipment or repair via mail order, or sent your children away temporarily for education?
hef19898 7y ago
I knew about customs free zones for storage and logistics. That you can do that with manufacturing is news!
hef19898 7y ago
Pretty creative way to subsidize "domestic" manufacturing for sure.

zaroth 7y ago

Seems like this is the tariffs doing exactly what they're supposed to do -- incentivize US domestic production. > Panasonic’s Canal said foreign solar panel manufacturers want the Buffalo plant’s cells because solar panels assembled abroad with American-made cells can be shipped to the United States tariff-free, according to U.S. trade rules implemented last fall. > Panasonic’s Buffalo operation is one of few U.S.-based solar cell producers because it is traditionally far cheaper to make the components in other countries, putting it in a unique position to serve the foreign demand. They would have to do the assembly into panels domestically as well if they didn't have the exemption due to the cells being US built.

magduf 7y ago
They're incentivizing domestic production, but at two costs: 1) environmental, from shipping stuff around the world several times (parts into the US to SolarCity, cells out of the US to final assemblers, assembled panels back into the US for final sale and use), and 2) cost to domestic purchasers. Finally there's 3) reduced demand for solar panels due to higher costs, which means we don't produce as much power this way, and instead use other means (generally fossil fuel). All in all, it's a terrible deal for us. If we're going to shoot ourselves in the foot on something made abroad, I propose we do it for smartphones. Slap a giant tariff on any cellphone made outside the US, like 1000%. Let's see how Americans like being stuck with their aging smartphones or having to spend $10k for a new one. Oh yeah, make sure the tariff applies to the LCD/OLED screens too, since we can't make those here.
- icegreentea2 7y ago
  I think there's a fun angle we could take on this. One could reasonably argue that large solar deployment in major industrialize countries is unlikely to occur "in time" without some sort of government prodding (of some sort). And when that time comes, it's gonna be big. We're going to need crank out solar panels and wind turbines like mad. In that context, basically everything we've done so far is basically warm up. Like 2% of US electrical production is from solar. We're gonna need to install like 25-100x the current installation base to do what we want. A reasonable assumption to make is that by the time the USA gets around to doing that, most other rich countries will be doing that too. This means that global supply is going to be challenged. This means that having the domestic capacity to grow this production is key. This means that being somewhat inefficient at this stage to build knowledge-base and competency in key parts of the supply and operations chain may actually be the long-term optimal solution. Of course, this is all just conjecture.
  - zaroth 7y ago
    Look at “Swanson’s Law” for insight into solar economics. We’re at the order of magnitude where widespread deployment is inevitable. It took a lot of learning curve to get there, there’s barely another order of magnitude left to be had. There are also the supporting infrastructure that needed to get there, such as battery/storage tech and smarter grids to handle the variable load. Governments around the world have put hundreds of billions of dollars into solar R&D. Last year we had 500GW of solar and 600GW of wind, and added 100GW of solar. We should add more than 100GW of new generation to that this year. It’s pretty good progress! I think global generation is about 15TW, and of course solar doesn’t generate 24/7, so there’s plenty of room to grow.
- zaroth 7y ago
  Just to put it in perspective, the 30% tariff on imported cells resulted in a net impact of about a 5% cost increase to the end consumer. [1] The basic macroeconomic equations always tilt to the side of free trade. I majored in economics. The basic theories work in an ideal and simplified world, and don't account for all the variables. The "hollowing out" of American manufacturing was a result of globalization spurred by free trade. Any government intervention which isn't a subsidy is going to be less than ideal theoretically, but in a geopolitical reality can still be the right choice. And to be sure, both the tax credit and net metering still provide a huge government subsidy for adding solar generation. [1] - https://news-media.energysage.com/wp-content/uploads/2018/05/Price_Impact_Solar_Tariff-1024x555.png https://news-media.energysage.com/wp-content/uploads/2018/05...

fjsolwmv 7y ago

Yes. Manufacture is a multi stage operation. Transportation costs (waste) is balanced against production cost at each stage. Tariffs are one (synthetic) aspect of production costs. This may be a hint that the tariff structure is inconsistent, or perhaps it working fine and transportation waste is an acceptable cost. One way to look at is that it's often cheaper to export inputs (cells) for foreign assemble and then reimport the outputs, even if tariffs are not a factor in the location of the inputs. I believe steel or aluminum or oil is similar in that taw materials are mined/extracted somewhere, sent elsewhere for processing, and then finished products sent back. You yourself might have once sent a piece of equipment or repair via mail order, or sent your children away temporarily for education?

hef19898 7y ago

I knew about customs free zones for storage and logistics. That you can do that with manufacturing is news!

hef19898 7y ago

Pretty creative way to subsidize "domestic" manufacturing for sure.