The Trump administration recently implemented tariffs on imported solar panels. American solar panel manufacturers have pressed...

The Trump administration recently implemented tariffs on imported solar panels. American solar panel manufacturers have pressed for tariffs on imported solar panels for several years; however, companies that install solar panels are very much opposed to tariffs. Use the supply and demand model to explain why different players in the US solar energy industry have opposing views on tariffs on imported solar panels.

For more information, see the “President Trump Slaps Tariffs on Solar Panels in Major Blow to Renewable Energy” by Brian Eckhouse, Ari Natter and Christopher Martin 1/22/18 in Time at http://time.com/5113472/donald-trump-solar-panel-tariff/

Expert Solution

The price of any commodity in the market is greatly affected by its demand and supply in the market .

Viewing the situation of solar panels in US, the cost of production the same is high in US as compared to what is imported from other countries like China. Therefore the price in the market of the solar panels is found to be low of the imported panel than what is domestically manufactured. And due to the lower prices the demand of the former is increasing. Concluding this situation the manufacturers of the solar panels domestically asked the Government to impose heavy import tariffs on the imported good which would subsequently increase the prices and would affect the domestic goods less.

The solar panel jnstallers are opposed to sych tariffs as the imported panels gave them more profits as low cost of the panels and heavy service charges for installation earned them greater profits than with the domestic manufactured.

Rahul Sunny answered 2 years ago

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