By Kelly Pickerel | June 6, 2022
Reuters first reported that President Joe Biden will postpone for two years any potential tariffs from the Dept. of Commerce investigation on imported solar panels from Southeast Asia.
Many in the solar industry, and many federal and state officials, have been pleading to Commerce Secretary Gina Raimondo to quickly resolve the investigation into whether Chinese solar companies are circumventing antidumping and countervailing duties (AD/CVD) that have been in place since 2012 by manufacturing portions of their products in Cambodia, Malaysia, Thailand and Vietnam. The investigation has effectively stopped solar panel supply to the United States and halted progress on utility-scale projects.
Through a White House statement, the Biden Administration announced it will stop any tariffs related to this case through 2024 (Section 201 tariffs are still in place) “in order to ensure the U.S. has access to a sufficient supply of solar modules to meet electricity generation needs while domestic manufacturing scales up.” Meanwhile, Commerce will continue its investigation. A source told Reuters that retroactive duties would not be applied, so large solar module buyers in the interim will not need to worry about billions of dollars of high tariffs (a 250% tariff has been suggested).
President Biden has also announced he will invoke the Defense Production Act (DPA) to boost domestic manufacturing of solar panels through loans and grants. The DPA, which Biden used to increase production of medical supplies during the COVID-19 pandemic, allows the president to direct domestic manufacturers to prioritize orders from the federal government. With the DPA, the federal government will increase “domestic solar manufacturing capacity by directing the development of master supply agreements.” The government will also establish “super preferences” to apply domestic content standards for federally procured solar systems, including using domestically manufactured solar components with the Buy American Act.
This federal procurement has been pledged for up to 1 GW of domestically produced solar modules in the near term and up to 10 GW over the next decade from U.S. government demand alone. The Biden Administration is also encouraging local governments to set up similar agreements to increase “the potential market impact over the next decade to as much as over 100 GW.”
Biden will also use the DPA to expand manufacturing of building insulation, heat pumps, clean fuels and grid infrastructure.
“Thanks to today’s actions by the White House, the American solar industry can finally get back to work driving economic growth, reducing electricity costs and lowering greenhouse gas emissions,” said Gregory Wetstone, President and CEO of the American Council on Renewable Energy (ACORE). “We thank the President and his staff for the vitally important relief he has provided for the nation’s solar sector.”
“While the Department of Commerce investigation will continue as required by statute, and we remain confident that a review of the facts will result in a negative determination, the president’s action is a much-needed reprieve from this industry-crushing probe,” said Abigail Ross Hopper, president and CEO of the Solar Energy Industries Association, in a statement. “During the two-year tariff suspension window, the U.S. solar industry can return to rapid deployment while the Defense Production Act helps grow American solar manufacturing.”
George Hershman, CEO of the nation’s largest utility-scale solar installer SOLV Energy, said his company is ready to move forward.
“President Biden’s decisive leadership enables companies like mine to move forward on stalled projects and bring solar workers back to our jobsites. This announcement provides much needed clarity in the short-term on trade, and takes action on his promise to deploy more clean energy resources domestically while growing American manufacturing in the long-term,” he said. “While I applaud the President for his leadership in building a brighter future today, the lingering threat of tariffs stemming from the ongoing circumvention case will continue to jeopardize our clean energy progress. I strongly urge the Department of Commerce to work toward a swift end to this case and put the solar industry fully back to work.”
Commerce Sec. Raimondo released her own statement:
As we invest in expanding domestic solar manufacturing and strengthening supply chains to protect our long-term energy security, imported solar panels remain an important component to addressing the immediate demands of bringing additional energy sources online and addressing the energy needs of the American people.
I remain committed to upholding our trade laws and ensuring American workers have a chance to compete on a level playing field. The President’s emergency declaration ensures America’s families have access to reliable and clean electricity while also ensuring we have the ability to hold our trading partners accountable to their commitments.
First Solar, the largest solar panel manufacturer in the United States and a thin-film solar panel maker, does not support today’s efforts by the Biden Administration to allow crystalline silicon solar panels to enter the country untariffed.
“Today’s proclamation directly undermines American solar manufacturing by giving unfettered access to China’s state-subsidized solar companies for the next two years. This sends the message that companies can circumvent American laws and that the U.S. government will let them get away with it as long as they’re backed by deep-pocketed political pressure campaign,” said Samantha Sloan, VP of policy for First Solar. “Furthermore, the use of the Defense Production Act to boost solar manufacturing is an ineffective use of taxpayer dollars and falls well short of a durable solar industrial policy, such as the Solar Energy Manufacturing for America Act (SEMA), which the administration has so far failed to deliver. Quite simply, the administration cannot stick a Band-Aid on the issue and hope that it goes away. Had the administration consulted with America’s solar manufacturers, they would have known as much.”
Story updated 10 a.m. ET with official White House statement
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