June, 6th 2022 – The solar industry received promising news today from the Biden Administration. The President stated that he intends to enact a 24-month exemption on solar tariffs which affect solar panel imports from Cambodia, Malaysia, Thailand, and Vietnam. What’s more, President Biden invoked the Defense Production Act in order to accelerate American manufacturing of solar panels and complementary equipment.
The Department of Commerce (DOC) decided to move forward with an investigation last March to discover whether or not imports of solar panels from Cambodia, Malaysia, Thailand, and Vietnam were circumventing tariffs on goods made in China. The investigation was spurred by a petition filed by California-based solar module manufacturer Auxin Solar.
Why does this matter for America’s booming solar industry? While American solar companies rely on foreign manufacturing of crystalline-silicon modules for projects here at home, the threat of retroactive tariffs cast upon foreign manufacturers has vastly curtailed solar panel imports, causing severe shortages of critical components which have effectively introduced “chaos and uncertainty into the market,” said Mike August, branch manager for solar distributor CED Greentech’s Portland and Bend markets, in a recent interview with Oregon Public Broadcasting.
Additionally, Biden’s exemption addresses concerns around retroactive tariffs that would befall domestic solar companies should they purchase solar modules from these countries – a foregone conclusion given that about 80% of US crystalline-silicon modules are shipped from Vietnam, Malaysia, and Thailand. That means billions of dollars otherwise held in reserve can be used to support clean energy projects here at home.
While the trade investigation could last months, cost increases of 25% or 50% on solar panels have been devastating to solar companies across the United States, which only add to the supply chain woes brought about by the global pandemic.
A White House press release reported: “The stakes could not be higher. That is why President Biden also continues to urge Congress to quickly pass tax cuts and additional investments that advance U.S. clean energy manufacturing and deployment. Failing to take these actions would deny consumers access to cost-cutting clean energy options, add risks to our power grid, and stall domestic clean energy construction projects that are critical to tackling the climate crisis.”
The Defense Production Act Spurs American Solar Jobs
In addition to a moratorium on new tariffs, President Biden seeks to accelerate American manufacturing of photovoltaic hardware and materials by invoking the Defense Production Act. As a result, domestic solar manufacturing capacity could be bolstered by 22.5 GW by 2024, which would greatly decrease American dependence on foreign manufacturing. However, it should be mentioned that invoking the act will not end the DOC’s ruling. Nevertheless, industry leaders are making it known that both these actions are a step in the right direction, as Solar Energy Industries Association (SEIA) president and CEO Abigail Ross Hopper makes definitively clear in the SEIA press release on June, 6th.
“The president is providing improved business certainty today while harnessing the power of the Defense Production Act for tomorrow. Today’s actions protect existing solar jobs, will lead to increased employment in the solar industry, and foster a robust solar manufacturing base here at home.”