(Bloomberg) — The Biden administration is initiating a set of policies that it says will help foster a deeper domestic supply chain for solar panels, following calls from U.S. manufacturers facing a surge in tariff-free imports.
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The measures announced Thursday include expanded tariffs, fiscal policy guidance that could increase demand for some U.S.-made solar equipment and promises of greater surveillance for signs of unfair trade.
“We are taking these new steps this week to support the U.S. clean energy industries, both to ensure we are doing our part to reduce emissions and to ensure our competition with China is truly fair,” said John Podesta, senior advisor to the president on international climate policy.
The effort presents a response to more than a year of pleas from solar companies that claimed tariff exemptions, a rise in cheap imports of foreign panels and federal tax policy decisions were undermining incentives in the Inflation Reduction Act intended to support solar energy. national production and eroding China’s green technology. domain.
Although the law triggered a wave of promised investments in American solar production, several important projects were quietly shelved or slowed down. It is unclear whether the new policies will be enough to boost national production, not just of solar panels, but also of their main ingredients, including cells, wafers, ingots and polysilicon.
Read more: Biden’s solar factory boom slows as imports flood the market
The announcement came as President Joe Biden projects a tough stance toward China in the election year, imposing a series of sweeping tariff increases on imports from the country that has come to dominate the production of solar panels and their components – although the technology has been invented. in the US Some manufacturers took action on their own last month, formally asking the US government to impose new duties on solar energy imports from four Southeast Asian countries, arguing that they are unfairly priced below cost and benefit from illegal subsidies. .
Shares of Chinese solar power manufacturers fell on Friday. Inverter maker Sungrow Power Supply Co. fell as much as 7%, the biggest intraday decline since January. lost up to 3.9%.
The Biden administration has said it will quickly end a policy that allows bilateral, or bifacial, solar panels to avoid so-called Sec. 201 safeguard tariffs currently set at 14.25%. The exclusion was first created under President Donald Trump’s administration – then extended under Biden’s administration. Initially considered a modest but essential safety valve to ensure large utility-scale solar projects could acquire the equipment, it has now become a widely used exception. Trump tried to eliminate the exemption in 2020, but lower courts blocked the measure; a federal appeals court ruled last November that the government could make the change after all.
Read more: US solar manufacturing rises, but losses mount, review finds
The government’s decision on Thursday was announced by the panel’s supporters. Mike Carr, head of the Solar Energy Manufacturers Coalition for America, praised Biden for closing a “loophole” that he said weakened the 201 tariffs to the point of irrelevance.
But American Clean Power Association spokesman Phil Sgro said the pivot “undermines business certainty” for solar developers and energy companies that have signed long-term business commitments on an opt-out basis.
The Biden administration is also raising the prospect of allowing more solar cells into the U.S. without being hit by Section 201 tariffs. Some manufacturers have argued that there is not enough domestic supply of these components to support U.S. panel manufacturing currently. However, they urged the president to quadruple the existing tariff-free 5 gigawatt quota for these components as U.S. cell production capacity increases.
The administration stops short of that, but said in a White House fact sheet that it is committed to pursuing a 7.5 gigawatt increase if the number of imported cells reaches the tariff-free threshold.
“This measure provides an important bridge for module producers to access the supply they need as the United States continues to advance solar cell manufacturing,” said Abigail Ross Hopper, president of the Solar Energy Industries Association.
The administration also promises to be more vigilant in watching for signs of unfair trade and scrutinizing panels imported into the U.S. under a tariff moratorium that Biden announced nearly two years ago. The Energy and Commerce departments “will closely monitor import standards to ensure that the U.S. market does not become oversaturated and will explore all available measures to take action against unfair practices,” the White House said in a fact sheet.
Read more: Asian solar imports are subject of new US trade investigation
The government has already concluded that Chinese manufacturers were skirting long-standing tariffs by assembling solar modules in four Southeast Asian countries – Cambodia, Malaysia, Thailand and Vietnam. Biden has waived anti-evasion duties on many of the solar cells and modules imported from those countries, but will not extend the two-year tariff holiday when it expires in early June.
The administration also promises that U.S. Customs and Border Protection will “vigorously enforce” the requirement that equipment imported under the moratorium be used by early December – otherwise duties must be paid. This includes requiring importers to provide certifications with “detailed information” proving that solar modules were deployed on time, the White House said.
–With assistance from Dan Murtaugh.
(Updates with stock movements in seventh paragraph.)
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