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Biden pauses new tariffs on solar
imports for 2 years
By
John Engel 6.6.2022
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September 14, 2021 - Joe Biden,
President of the United States, speaks during a visit the Flatirons
Campus of the National Renewable Energy Laboratory in Arvada,
Colorado. The President received insight into NREL’s long-term
research mission, vision, and critical objectives which directly align
with his decarbonization goals and national energy priorities.(Photo
by Werner Slocum / NREL).
President Joe Biden has paused for two
years any new tariffs on solar modules imported from four Southeast
Asian countries that are the subject of a federal trade investigation.
Commerce is investigating whether solar
modules imported from Malaysia, Thailand, Vietnam, and Cambodia are
circumventing trade duties against China. These four countries now
account for more than 80% of the solar modules imported into the U.S.
The investigation could have brought
retroactive duties on modules imported after April 1, 2022, which
brought the entire industry to a
standstill "overnight," according to Kevin Smith, CEO of
Lightsource bp Americas.
"Suppliers aren't going to take the risk
of 50-250% tariffs, and owners/developers can't take that risk,
either," Smith said. "You can't build a 100 MW, $100 million project
with $50 million worth of panel supply, and then six months or a year
later, they show up and say, oh, you owe us another $100 million for
tariffs."
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In addition to the pause on new tariffs,
Biden is invoking the Defense Production Act to support domestic solar
manufacturing. Biden
invoked the Defense Production Act in April to boost mineral
production for renewable energy and electric vehicles.
The Commerce investigation of the Auxin
Solar petition continues. Any duties levied against Southeast Asian
module imports would be imposed after the 24-month period expires, the
agency said in a statement.
The Biden administration has faced an
onslaught of pressure from the solar industry since Commerce opened an
investigation into the
petition filed by Auxin Solar, a small manufacturer in San Jose,
Calif.
Auxin Solar CEO Mamun Rashid said Monday
in a statement that President Biden is interfering in the Commerce
investigation, calling his executive order "potentially illegal."
"(The president) has opened the door wide
for Chinese-funded special interests to defeat the fair application of
U.S. trade law. Since filing this case, Auxin has been well underway
to scaling up. If the President will follow through on his stated
intent to support the U.S. domestic industry – including grants to
scale and produce upstream inputs like cells and wafers – Auxin is
ready, willing, and able to meet that challenge."
The Solar Energy Industries Association,
American Clean Power Association (ACP), and other clean energy
advocacy groups united to bring a
$5 million campaign against President Biden and the Commerce
Department to end the investigation.
ACP CEO Heather Zichal called the
investigation and possibility of additional tariffs an "existential
threat" to solar in the U.S. and accused Auxin Solar of gaming U.S.
trade law.
"I've been working to deploy solar for
two decades," Zichal told Renewable Energy World's John Engel
during a recent episode of the
Factor This! podcast. "And I never thought that I'd be
having to raise money to run a campaign against the Biden
administration."
In a statement following the White House
announcement on June 6, Zichal said the move "will rejuvenate the
construction and domestic manufacturing of solar power by restoring
predictability and business certainty that the Department of
Commerce’s flawed inquiry has disrupted." She urged Commerce to
swiftly conclude the inquiry.
SEIA CEO Abigail Ross Hopper added in a
separate statement that Biden's decision will save solar jobs.
Commerce Secretary Gina Raimondo has
contended that the
investigation is required by law, since Auxin Solar's petition met
all of the requirements under federal statute. The investigation could
bring new tariffs of 50-200%.
The two year pause on new tariffs from
President Biden could give the solar industry the needed time to
ramp up domestic manufacturing, advocates say.
Rhone Resch, who served as the CEO of
SEIA from 2004-16, estimates that the U.S. could meet its own demand
for solar modules within two years with the appropriate incentives in
place.
"From my perspective, I think it's
absolutely critical that we do focus on bringing (solar) manufacturing
back to the United States." He said the U.S. can successfully compete
with Chinese suppliers "as long as the right mechanisms are put in
place."
One such mechanism would incentivize
domestic manufacturing throughout the solar supply chain.
Sen. Jon Ossoff (D-GA)'s Solar
Manufacturing for America Act (SEMA) is supported by domestic
manufacturers, Auxin Solar included, and utility-scale developers
alike. The bill passed the U.S. House of Representatives but has yet
to garner a vote in the Senate.
The bill would create tax incentives of
11 cents/watt for integrated modules, 4 c/w for cells, $12/sq. m. of
wafer, and $3/kg of polysilicon. Production of non-integrated solar
modules would receive 7 c/w. Production of solar trackers and
inverters would also receive credits.
"Any incentive that is brought forward,
we will take it and run with it," said Martin Pochtaruk, CEO of North
American module manufacturer Heliene. "It's better than the kick in
the butt that we generally get."
John Engel is the Content
Director for Renewable Energy World. For the past decade, John has
worked as a journalist across various mediums -- print, digital,
radio, and television -- covering sports, news, and politics. He
lives in Asheville, North Carolina with his wife, Malia. Have a
story idea or a pitch for Renewable Energy World? Email John at
john.engel@clarionevents.com.
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