When it comes to the global economy and the part solar energy plays in all of it, perhaps no two countries are more significant than the U.S. and China. The New York Times reported big news from Washington recently, as President Biden officially announced a two year pause on solar tariffs in an attempt to offset rising inflation.
Right now, many homeowners are weighing the pros and cons of going solar. Or really, weighing the pros we should say. The reality is with rebates, incentives, and solar tax credits at an all time high, just as inflation continues to surge, going solar has become a so-called no-brainer.
Add to that that the Fed’s ITC, or Investment Tax Credit for solar, is set to drop from 26% down to 22% at the top of 2023, before disappearing completely in 2024. But solar tariffs aren’t the only tariff President Biden is considering rolling back, as his administration looks for creative ways to combat the most rapid price increases in 40 years.
Trump’s Tariffs on Chinese Goods Going Bye-Bye?
Many corporate interests, along with economists, have been applying pressure on President Biden to ease import taxes. The ultimate goal is cutting costs for consumers, who have been hit hard by inflation from coast to coast.
The month of May saw inflation rates hit 8.6%, a number that is difficult to stomach. With midterm elections coming up in November, the consequences of a reeling economy could be catastrophic for Democrats at the polls.
This is where solar power comes in. As President Biden has made his plan to cut carbon emissions clear, it simply makes sense to kill two birds with one stone here and combat climate change while simultaneously saving homeowners thousands in energy costs through solar panel installations.
Lifting Tariffs Saves Homeowners How Much?
Some case studies have found that lifting tariffs could save the average homeowner $797 per year. When it comes to solar, which typically lasts around 30 years when we’re talking about rooftop panels, you’re looking at tens of thousands in energy cost savings over the lifespan of a system.
This particular tariff discussion is occurring at a very unstable moment in the U.S. economy. Consumer confidence is way down as costs continue to rise, affecting nearly every sector from gasoline, to food prices, to energy costs and beyond.
Stock markets are down, entering a potential hibernation period often referred to as a bear market. Just this past January, stock prices were 20% higher on average. Now the Federal Reserve is actively moving rates from neutral to restrictive territory in preparation for a major recession.
Is Solar the Answer?
While it may not save everyone everywhere all at once, pausing the solar tariffs for two years was certainly a savvy move by the Biden Administration. Lifting these tariffs and others like it could reduce the inflation rate by a quarter of a percentage point or more, according to multiple, well respected economists.
There aren’t too many other options on the table at the moment to offset our current inflation crisis, which is not unique to the United States. The global economy as a whole is suffering right now from rising costs across the board, and wages have stagnated for decades, putting us in an even more precarious position.
For homeowners looking to cut their monthly overhead, particularly when it comes to energy costs, the solution is clear: compare multiple quotes and estimates from local solar companies, see what rebates, incentives, and tax credits are being offered, and see if you can get your rooftop array installed with no upfront costs at all. Zero down solar is here, it’s a reality, and it may very well be within reach.
That’s one way to ease the pressure of this inflation crisis. And it may just be the simplest method to execute for homeowners nationwide.