Last-Second Save for Solar Industry

In March the US Department of Commerce (DOC) announced its investigation into whether Chinese companies are circumventing U.S. tariffs by moving components for solar panels through four Southeast Asian countries. This came after Auxin Solar, a small solar panel manufacturer based in California, filed a petition requesting an inquiry.

DOC is investigating whether Chinese manufactures are funneling solar components through Cambodia, Malaysia, Thailand, and Vietnam, where they are assembled for export the United States. Officials have not yet found any evidence of trade violations, but the threat of retroactive tariffs (to as early as November 2021) has significantly disrupted the supply and manufacture of solar modules from these four Southeast Asian countries. They provide a whopping 82% of the solar modules in the United States, according to the American Clean Power Association. But the solar industry is now breathing a sigh of relief. President Biden will declare an exemption on solar imports on Monday June 13, and waive the threat of tariff for two years. 

“There is going to be this safe harbor timeout on the … collection of duties and that’s at the heart of what’s going to save all of these solar projects and ensure that they are going forward” said a source, familiar with the White House plan, to Reuters. 

The same source said that Biden will also invoke the Defense Production Act to drive U.S. manufacturing of solar panels and other clean energy technologies in the future with support of loans and grants. 

Around the country, solar companies were worried they were going to be forced to delay projects, and consider layoffs, according to the Solar Energy Industries Association (SEIA). And energy experts were warning that it could have caused the loss of more than 100,000 American jobs, including 18,000 manufacturing jobs, and will impact climate goals. SEIA says that its members are forecasting a 46% decline in the number of solar panels installed next year.

“It is an absurd result that the mere request by one company can bring the industry to its knees in this way. The U.S. solar market is in chaos. Shipments have stopped, installations are stalled, and people are being laid off,” Abigail Ross Hopper, chief executive of the Solar Energy Industries Association, told The New York Times.

Leo Azevedo, procurement manager at BNRG, a Maine solar plant thinks the risk of ordering solar panels is too high right now.

“Worst-case scenario, you can think about retroactive tariffs of up to 240%,” says Azevedo to NPR.

The SEIA estimates that the delayed solar deployment because of this investigation would have resulted in an additional 364 million metric tons of carbon emissions by 2035.  

Tariffs on solar panels from Southeast Asia imported after the two-year period could be imposed, but the threat of retroactive payments are off the table, according to the White House source.  

More on solar energy

Five Reasons to be Optimistic About Solar Energy

Solar Photovoltaic Product Guide

For more information:

Solar Energy Industries Association
seia.org