The tariff reaches as high as 250% of the cost of solar components shipped from four Southeast Asian countries responsible for 80% of the supply of solar in the US.
A small coalition of Democrat and Republican congress members filed legislation to repeal the pause on tariffs shipped from four Southeast Asian countries responsible for 80% of the US supply of solar modules.
“We cannot allow foreign solar manufacturers to violate trade law, especially when it comes at the expense of American workers and businesses,” wrote Congressman Dan Kildee (D-MI), who filed the repeal attempt via the Congressional Review Act. He was joined by Republicans Bill Posey (FL), Bob Latta (OH), and Garret Graves (LA), as well as Democrats Bill Pascrell (NJ) and Terri Sewell (AL).
Since March 2021, the solar industry has reeled from potential tariffs on goods manufactured in Cambodia, Malaysia, Thailand and Vietnam, four nations alleged of harboring Chinese goods in violation of anti-circumvention laws.
Tariffs on solar goods enforced under anti-circumvention laws have historically exceeded 50% to 250%. The looming threat of tariffs created an untenable level of risk that cascaded into cancelled and delayed projects. The effect was so stark that it led the Solar Energy Industries Association to cut its project deployment forecast in half for the year.
About 20% of utility-scale solar capacity was delayed or cancelled in the first half of 2022 due to supply problems and uncertainty. This uncertainty was temporarily lifted when President Joe Biden placed a 24-month moratorium on solar tariffs from the four nations on June 5, 2022.
The tariff exemption applies to modules that are imported before June 6, 2024, and installed project sites before December 2024.
(Read: “White House freezes solar tariffs: An industry reacts“)
On December 2, 2022, the US Department of Commerce made a preliminary determination that numerous major and minor suppliers in Southeast Asia are in violation of anticircumvention laws.
“The Biden administration found in its own investigation that China is evading U.S. tariffs on solar imports, but has paused action on this matter, which is unacceptable,” said Kildee. The repeal will “help America’s domestic solar manufacturing industry grow to meet our nation’s energy needs,” he said.
“The Biden Administration continues to put American manufacturers last,” said Congressman Latta.
Last August, the Biden Administration passed a record-breaking $370 billion package, the Inflation Reduction Act (IRA), supporting climate and energy measures, including over $60 billion in rich incentives the domestic manufacture of solar components and other cleantech. But solar industry members say the US needs time to build its manufacturing capacity, and cutting off supply of panels now would be detrimental to the effort to mitigate the worst effects of climate change.
“The world is not yet on track to limit global warming to 1.5 degrees Celsius compared to pre-industrial levels, but solar can help us change that trajectory,” said Scott Wiater, president and chief executive officer, Standard Solar. “The U.S. can play a big role, but to lower carbon emissions sufficiently and achieve our country’s climate goals, we have to deploy 70 GW of solar a year in the next few years.”
The US currently produces about 7.5 GW of solar panels per year. The IRA could increase that number to 15 GW over the next two years, “but that would still not be nearly enough capacity to rely solely on domestic panels,” said Wiater.
(Read: “Solar tariffs are not the answer”)
The Congressional Review Act resolution will expire after 60 days if not passed. If Biden’s policy is repealed, the move would heavily damage solar panel supply and project installations in the near term.
“Fair trade cannot exist where one side plays by the rules and the other lies, cheats, and circumvents like the Chinese Communist Party. Last year the Commerce Department wisely heeded our bipartisan calls to probe CCP corruption in producing solar cells and modules. They confirmed that our trade laws are being evaded by Chinese solar companies. We need strong tariffs now,” said Congressman Posey.
