An investigation by the U.S. Commerce Department into solar panels produced in four Southeast Asian countries could cost the solar industry thousands of jobs and is already responsible for widespread project delays and cancellations, a solar trade group says.
The department announced late last month that it is looking into claims that importing solar panels from Cambodia, Malaysia, Thailand, and Vietnam amounts to a circumvention of anti-dumping limits that have been imposed on China.
The case could result in retroactive tariffs as high as 240%, according to an article posted by the Los Angeles Times, and threatens as as many as 80% of solar protects that are currently planned in the U.S.
Heather Zichal, who leads the American Clean Power Association, said the Commerce Department action “signals that the Biden Administration’s talk of supporting solar energy is empty rhetoric.” She said the probe “drove a stake through the heart of planned solar projects and choked off up to 80% of the solar panel supply in the U.S.”
The Solar Energy Industry Association also took issue with the department’s announcement. In a written statement, the organization’s president and CEO Abigail Ross Hopper, said she hoped the government would complete its work quickly and “end this unnecessary roadblock” to wider deployment of renewable energy.
“The investigation is based on a meritless trade case that is hammering the solar industry in real time and diminishing our efforts as a country to tackle climate change,” she said.
The trouble started with a complaint filed by a small manufacturer of solar panels in California called Auxin Solar, which alleged that panels are assembled in those four countries with Chinese-made components. Auxin Solar’s CEO, Mamun Rashid, said panel imports amounted to “pervasive backdoor dumping” of solar panels by China.
According to a post at Utility Dive, the SEIA has called on the department to issue a preliminary decision against Auxin’s complaint. An investigation could take up to a year for a final ruling, placing pressure on developers to find new suppliers.
In February, President Biden announced that tariffs on imported solar panels that were first imposed by the Trump administration would be extended, although the number of cells that could be imported without tariffs would be doubled, The New York Times reported. The administration also said it would open talks with Mexico and Canada to allow those countries to export solar goods to the U.S. duty-free, and that a type of two-sided panel would be exempt from duties.
Some U.S. manufacturers criticized the decision, claiming that the exemptions would keep them vulnerable to cheap Chinese panels. Among them was Mark Widmar, CEO of First Solar.
According to the SEIA, a poll among its members found that 74% of the respondents said that their supply of solar modules has been canceled or delayed in the wake of the Commerce Department announcement.
Although the SEIA got more than 200 responses from its members after launching the survey, only 10 of them were residential developers, according to Utility Dive. That suggests the residential solar market could be somewhat insulated from market uncertainties because they buy their panels from U.S. distributors and don’t import them directly.
The industry is already being hampered by supply chain constraints that have helped push up the installed price of solar by as much as 14% in the last quarter of 2021 when compared to the same period a year earlier. Price hikes for residential projects appeared lower, up about 5% from a year earlier.
SEIA said 84% of all U.S. solar module imports come from the four countries affected by the Commerce Department probe, and that there isn’t enough non-Chinese capacity elsewhere to meet demand. It would take years to bring the U.S. supply chain to a point where it could take up the slack.
Scott Gibson is a contributing writer at Green Building Advisor and Fine Homebuilding magazine.
Get building science and energy efficiency advice, plus special offers, in your inbox.