President Joe Biden gave a boost to the US solar industry and to the world yesterday, declaring a two-year suspension of import tariffs on solar panels from four Southeast Asian countries. He also invoked the Defense Production Act to help ramp up domestic production of solar panels and cells, and to spur the nation’s transition to clean energy, because it turns out that the climate emergency is still a thing.
The Washington Post explains (free linky here) that the tariff exemption clears up a regulatory mess that had put a bunch of big utility-scale solar projects on hold:
A Commerce Department investigation into alleged dodging of tariffs by Chinese panel- and cell-makers has paralyzed much of the industry. The investigation, which could go on for months, carries the threat of retroactive tariffs, driving up the cost of importing these parts and severely hampering the industry’s capacity.
“Diversifying our energy sources and responding to the climate crisis have never been more urgent, and solar energy is an essential component of meeting those needs,” Commerce Secretary Gina Raimondo said in a statement Monday. “The President’s emergency declaration ensures America’s families have access to reliable and clean electricity while also ensuring we have the ability to hold our trading partners accountable to their commitments.”
The exemption will apply to solar cells and panels imported from Cambodia, Malaysia, Thailand, and Vietnam, which should help get stalled solar projects off the ground, while the use of the Defense Production Act is intended to help US manufacturers be more competitive. Planet’s on fire, we need all of it.
The Post reports that investors were spooked by the prospect of having to pay retroactive penalties due to the tariffs, and that led to delays or outright freezes on “hundreds” of major solar projects.
Eighty percent of U.S. solar firms say the investigation has jeopardized at least half the projects they planned to complete in 2022, according to an industry survey. The tariffs under consideration by Commerce could exceed 50 percent of the price of panels.
The Commerce Department investigation will go ahead, and it’s still possible that after the 24-month exemption ends, some companies may still be required to pay tariffs if they were found to be violating the law.
A “senior administration official” told the Post that presidents have the power under the Tariff Act to use emergency authority to do what Biden’s doing, although the story also notes that energy analysts believe lawsuits are likely from American suppliers that don’t like those Southeast Asian products coming into the US. The Post cites statements from two US solar firms that said the exemptions will in effect let Chinese companies sidestep US trade laws and sneak their products into the US through third countries in Southeast Asia. The Post ‘splains,
The Chinese firms are accused of dumping heavily government-subsidized solar panels and cells into the American market. Investigators are examining whether manufacturers in Malaysia, Thailand, Vietnam and Cambodia have become conduits for such Chinese materials. Executives from Chinese solar companies say the allegations are baseless, noting hundreds of millions of dollars are being invested locally in their Southeast Asia subsidiaries on solar technology and operations, making the case that the factories are not merely pass-throughs.
US manufacturers’ worries aside, the investigation has thrown a lot of uncertainty into the clean energy market at a time when decarbonizing the US economy is a top priority. Companies that have had to freeze or limit utility-scale solar projects say US manufacturers simply aren’t yet producing nearly enough panels and cells to meet demand.
The American Clean Power Association says that the president’s plan will enable solar installations to get back on track while seeding the scale-up of a robust domestic manufacturing industry.
With oil and gas prices going crazy due to supply chain problems and Russia’s invasion of Ukraine, we need clean energy to ramp up and start reducing our dependence on fossil fuels. That has to happen rapidly anyway, to keep the planet habitable for large mammals like you and me, to say nothing of our children and pets. Energy Secretary Jennifer Granholm and other administration officials worried the slowdowns caused by the investigation might even put at risk the US plan to reach 100 percent clean power generation by 2035.
The Defense Production Act will also be used to increase production of heat pumps, which are far more efficient at heating and cooling buildings; it will also apply to producing more equipment used to make low-emissions fuels and for parts that will be used to beef up the electrical grid.
The administration says the Commerce investigation will go ahead without any interference, but that the temporary tariff exemptions are needed “to ensure the U.S. has access to a sufficient supply of solar modules to meet electricity generation needs while domestic manufacturing scales up.”
CNBC reports that solar energy stocks were up sharply Monday following the announcement.
Also, we’ll just add that if you’re a fan of keeping the planet mostly livable for humans and elephants and meerkats and tuna, it’s pretty friggin’ vital to keep Republicans out of power in 2022 and 2024. No pressure or anything.
[WaPo (free link) / CNBC / Photo: Photo: Stacie Peterson, AgriSolar Clearinghouse, Creative Commons License 2.0]
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