What effect will the tariff on non-US made solar panels have?

Cost of solar power per Watt DC.  Source

According to the graphic in PV Magazine the cost of solar power has been dropping at a rate of 6% a year since 2013, even though the cost of the solar modules has remained flat.

The cost of solar modules was approximately 15% of the cost of a residential photovoltaic installation, 20% of a Commercial installation and 35% of a Utility Scale installation using Q2 2017 prices.

The recent 30% tariff levied against foreign made photovoltaic cells can be expected to raise the cost of all systems by less than fifteen cents per Watt from the historic, low-water mark.

The tariff covers both solar modules and solar cells and is for 30% the first year, 25% the second year, 20% the third year and 15% the fourth year.  Contrary to what has been reported, the tariff applies to all foreign made solar cells and modules, not just Chinese made units.


Rent and profit
The most stable portion of solar power costs have been rent and profit.

The rent and profit portion of the Commercial installations hoovered around sixty-five cents a Watt from 2011-through-2016.  The rent and profit portion of Utility scaled installations floated in the thirty-five cents-to-forty-five cents per Watt range.

Labor and Engineering costs
The cost that has shown the most decline has been Labor and Engineering.

This is due to the maturing of solar installations.  Like most things, the first few installations are the most painful as contractors climb the learning curve.  A rule-of-thumb in Project Management is to budget 25% for "field orders".  That rule-of-thumb applies to the first-of.  Subsequent builds are much more efficient, in both cost and time from start-to-finish.

This increased efficiency is diluted, somewhat, by new operators entering the solar field.   

Likely to be challenged
The tariff is likely to be challenged in court because "The statute requires that any action taken must facilitate a positive adjustment to import competition and provide greater economic and social benefits than costs." and the Section 201 action is subject to a 120 day review. (emphasis mine)

The fact that solar modules are only 30% of the cost of a Commercial installation means that 70%  goes to other sectors of the economy:

• Land owners in the form of rent
• Investors in the form of return on investment
• Construction workers as wages
• Heavy equipment firms leasing out earth-moving equipment
• Fabricators making racking
• Electrical equipment manufacturers
• Truckers moving all this stuff around

Using Executive action to arbitrarily raise the cost of solar cells to protect one, very small segment of the production chain will end up gouging all of the other links in the chain as the work dries up or they have to take a financial haircut to stay competitive.

Unfocused
The single, remaining US solar cell manufacture makes high end, monocrystalline silicon wafers.  The Section 201 tariff also applies to slightly less efficient (and significantly less expensive to manufacture) polycrystalline silicon solar cells and to significantly less efficient (and MUCH less expensive) amorphous silicon solar cells.

The net result is that solar installations will end up paying monocrystalline prices, or higher, for the next four years because the US industry engaged in margin retreat and abandoned other, less profitable segments.

Even if the Section 201 challenges are unsuccessful, the net effect after extrapolating the declining cost of all the other components of a solar system is to increase the cost of an installed system to what it was 12 months earlier.  If solar made sense in Q4 2016 then it makes economic sense in Q1 2018.