Tariffs on Chinese solar panels that caused significant Hill turmoil in the past are once again threatening rifts between Democrats, the solar industry and President Joe Biden.
In 2022, the Biden administration put a pause on tariffs that were set to be imposed on Chinese manufacturers who routed panels through four Southeast Asian countries. The matter was the subject of intense lobbying by U.S. solar generation interests and Democrats who argued that, despite apparent wrongdoing by China, tariffs would cripple the industry by raising prices.
That pause is set to expire June 6. In addition, some domestic solar manufacturers are asking the administration to impose more extensive tariffs. Both developments are reviving a dispute that has been relatively dormant for months.
“We can either let cheap Chinese panels and Southeast Asian panels circumvent our tariffs and destroy the American solar industry or not,” Sen. Jon Ossoff (D-Ga.) told E&E News. “That’s the choice before the Biden administration right now.”
Ossoff, whose state boasts several solar manufacturing plants, this week called for the immediate end to the moratorium.
And Sen. Sherrod Brown (D-Ohio), whose state also hosts solar manufacturing, has called on the White House to “immediately” impose new tariffs on the Chinese solar industry.
But Sen. Mark Kelly (D-Ariz.) said, “We’ve got a growing solar industry, not only in Arizona, but across this country. We can’t put ourselves in a situation that results in projects being shut down because they don’t have access to [solar panel] parts.”
The situation could result in a déjà vu moment. After the 2022 moratorium, some Democrats forced Biden to veto a bipartisan effort to overturn it.
The White House did not respond to a request for comment on the request for new solar tariffs.
Push by U.S. manufacturers
Solar panels on the assembly line at the First Solar manufacturing plant in in Walbridge, Ohio, in 2021. | Tony Dejak/AP
Last month, a new coalition of seven leading U.S. solar manufacturers filed a petition with the Commerce Department requesting the new tariffs on imports from four Southeast Asian nations.
The group alleged that some Chinese companies had moved their heavily subsidized solar operations to Cambodia, Malaysia, Thailand and Vietnam.
They requested that Commerce investigate that development and impose more extensive anti-dumping and countervailing duty tariffs.
An attorney for the coalition said the current moratorium only applies to Chinese companies that manufacture solar panels in Southeast Asia with Chinese parts, which limits the impact of those tariffs by excluding companies that produce solar cells in Southeast Asia with base materials originating in China.
“When the tariff holiday expires on June 6, most of the imports from those countries won’t be covered because it’s no longer primarily a Chinese product. We need these cases to cover the product that’s actually made in those four [Southeast Asian] countries,” Tim Brightbill said in an interview.
The four Southeast Asia countries accounted for more than 80 percent of U.S. solar panel imports in the fourth quarter of last year, according to S&P Global Market Intelligence.
Solar panel glut a good thing?
There is hope among some clean energy Democrats and solar manufacturing leaders that political blowup could be avoided this time around.
An influx of panels, mostly from China, and the effect of Inflation Reduction Act incentives have resulted in a 50 percent decrease in prices over the last year, with the International Energy Agency projecting even more drops over the next decade.
That’s exactly why manufacturers are pushing the new tariffs, as they believe Chinese companies are intentionally bringing down prices with a supply glut to put U.S. factories out of business.
The price realities have some industry players and advocates hoping the effect of new tariffs, if successful, would be more muted than if tariffs were implemented in 2022.
“We just had the best year ever for solar,” said Senate Budget Chair Sheldon Whitehouse (D-R.I.), an outspoken climate hawk. “I think that the demand and the pressure and the lower cost … would still put solar on a strong trajectory.” Whitehouse did not indicate whether he was supportive of new tariffs.
Indeed, NextEra Energy, one of the largest renewable energy providers in the U.S., said in an earnings call that a new solar tariff imposition would not be much of a burden.
“The bottom-line takeaway for folks is … we expect that any trade actions that would occur this time around will be very manageable,” said CEO John Ketchum. “We are very well-positioned to manage through this like we always do.”
‘A potential threat’
A joint statement from the Solar Energy Industries Association (SEIA), the American Clean Power Association (ACP), Advanced Energy United (United) and American Council on Renewable Energy (ACORE), in response to the new petition, was not nearly as optimistic as NextEra.
“Today’s filing creates market uncertainty in the U.S. solar industry and poses a potential threat to the build-out of a domestic solar supply chain,” the groups said.
“We are deeply concerned the [anti-dumping and countervailing duty] petitions will lead to further market volatility across the U.S. solar and storage industry and create uncertainty at a time when we need effective solutions that support U.S. solar manufacturers.”
Sen. Martin Heinrich (D-N.M.) said, “There is concern that we don’t fully understand what the impact of a successful petition might be. We’re building solar factories, but in most cases, they’re not yet fully stood up.”
Brown said the International Trade Commission and Commerce Department “need to move on these petitions immediately.”
“It’s clear that China’s cheating is rampant in the solar industry — the Chinese government will do anything to stop the American solar manufacturing industry before it takes off,” he said.
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