A Commerce Department probe could put the solar industry at risk, supporters say

In a decision that could dramatically undercut President Biden’s ambitious climate targets, the Commerce Department said Monday it was investigating whether imports of solar panels from Southeast Asia circumvent anti-dumping rules that limit imports from China.

Clean energy leaders said the investigation – which could lead to retrospective tariffs of up to 240% – would seriously hamper the US solar industry, result in thousands of layoffs and jeopardize up to 80% of planned solar projects in one of Threatening Biden’s top clean energy goals and running counter to his administration’s push for renewable energies like wind and solar.

The Commerce Department’s decision “shows that the Biden administration’s talk of supporting solar power is empty rhetoric,” said Heather Zichal, executive director of the American Clean Power Assn., a clean energy group.

Zichal, who served as White House energy adviser under President Obama, urged Biden to reverse the decision immediately. “America’s solar workers and clean energy community are watching and will be remembered,” she said, calling the impact of the investigation “apocalyptic” for the industry.

“Overnight, the Commerce Department … drove a stake in the middle of proposed solar projects and choked off up to 80% of solar panel shipments to the US,” she said, adding that Biden “needs to fix this now.”

The Commerce investigation follows a complaint by Auxin Solar, a small California-based manufacturer, that said solar panels, which are assembled in four Southeast Asian countries — Cambodia, Malaysia, Thailand and Vietnam — circumvent rules restricting the import of solar cells and modules to block China.

The White House declined to comment, but a Commerce Department spokesman said the agency will conduct “an open and transparent investigation to determine whether circumvention” of US trade law has occurred. “This investigation is just a first step… and no additional tariffs will be imposed at this time,” spokesman Jeremy Edwards said.

Mamun Rashid, CEO of Auxin Solar, said he was grateful that trade officials recognized the need to investigate what he called the “pervasive backdoor dumping” of solar panels by China. Solar makers in smaller Asian countries use parts made by Chinese companies to keep costs down while avoiding high anti-dumping and countervailing duties on Chinese goods, he said.

“For years, Chinese solar manufacturers have refused to price their products fairly in the US, and have made considerable efforts to continue undercutting American manufacturers and workers by… establishing operations in countries not covered by these tariffs,” said Rashid. “Fair trade and enforcing our trade laws are essential to rebuilding America’s solar supply chain and manufacturing solar energy [panels] back in America.”

The Commerce Department’s action comes weeks after Biden extended tariffs imposed by former President Trump on most solar panels imported from China and other countries. Alluding to his efforts to fight climate change and promote clean energy, Biden ruled out tariffs on some panels used in major utility projects.

Biden’s Feb. 4 announcement continued many Trump-era tariffs, but it exempted so-called bifacial solar panels, which can generate electricity on either side and are now used in many large solar projects. The technology was still nascent when the tariffs were first imposed by Trump.

Biden also doubled an import quota for solar cells — the main components of modules used on rooftops and utility sites — to 5 gigawatts, allowing for a larger number of imported cells used by domestic manufacturers.

Biden faced a choice between competing constituencies over solar power, a key part of his climate and clean energy agenda. Unions support import restrictions to protect local jobs, while the solar industry relies in large part on cheap modules imported from Asia.

In a speech this month, Commerce Secretary Gina Raimondo said the US needs to encourage domestic manufacturing of products like solar panels.

“The more we rely on other countries to make things for us, the more vulnerable we become to supply chain disruptions like the ones we’ve seen over the past two years,” she said on March 15, adding that “at least 95% of the market for It is estimated that the cells used in solar panels contain components made in China.”

Biden has a goal of reducing greenhouse gas emissions by at least 50% below 2005 levels by 2030, and solar power is a key part of that agenda. A Department of Energy report last year said solar power has the potential to supply up to 40% of the country’s electricity within 15 years – a tenfold increase in current solar output.

Abigail Ross Hopper, president and CEO of Solar Energy Industries Assn., which represents solar installers, called the Commerce Department investigation a “misstep” that could have a devastating impact on the U.S. solar market and result in tens of thousands of layoffs. The decision could result in retrospective tariffs of up to 240%, a possibility Hopper said would have an immediate and “dissuasive effect on the solar industry.”

Additional tariffs could result in the loss of 70,000 American jobs, including 11,000 manufacturing jobs, she said, and could lead to a dramatic decline in solar installations and a corresponding increase in greenhouse gas emissions from fossil fuels like coal and natural gas.

“Solar prices are rising, federal climate legislation has stalled and trade restrictions are now tightening,” Hopper said. “Commerce should end this investigation quickly to mitigate the damage it will cause to American workers and our nation’s efforts to combat climate change.”

Trump approved tariffs on imported solar power components in 2018 and said his administration will always protect American workers and businesses from unfair competition. Tariffs were initially set at 30% and later reduced to 18% and then to 15%. They should be phased out without Biden’s intervention.

According to Biden’s decision, tariffs will be set at 14.75% and gradually reduced to 14%.

Since the tariffs were introduced, the production of solar modules in the USA has tripled. Chinese and South Korean companies have established factories in Georgia, Florida and Alabama, and an American company, First Solar Inc., expanded domestic production at a plant in Ohio.