The U.S. solar industry needs certainty: our letter to the Biden Administration

In late March, the U.S. Department of Commerce opened an inquiry to determine whether large solar manufacturers are circumventing tariffs on solar materials produced in China. We commend the Biden Administration’s ambitious clean energy targets, and know that achieving them will require a thriving solar industry. Instead, the anti-circumvention inquiry is leading to project delays and cancellations, job loss, and an increase in carbon emissions. We urge the Department of Commerce to expedite its investigation and restore certainty and growth to our country’s solar industry.

Below, in full, is the letter Vote Solar sent to the Biden Administration on May 20, 2022. 

Dear President Biden, Secretary Raimondo, and National Climate Advisor McCarthy,

Vote Solar is greatly concerned about the economic and environmental impacts of the U.S. Department of Commerce anti-circumvention inquiry initiated on April 1, 2022 into crystalline silicon photovoltaic (PV) cells and panels imported from Malaysia, Vietnam, Thailand, and Cambodia.  We commend you and your Administration for setting ambitious climate action goals to reach 100% clean electricity by 2035 and a net-zero carbon pollution economy by 2050. We also support the firm efforts of the Administration and the solar industry to crack down on terrible labor abuses used in portions of the Chinese solar industry. However, the present anti-circumvention inquiry is severely stalling progress toward these ambitious climate targets. 

The anti-circumvention inquiry is impacting our ability, as a country, to rapidly transition away from fossil fuels and toward 100% clean, zero-emission electricity. Solar power in the U.S. has seen incredible, explosive growth over the last several years partly because it has become cheaper than any other power source. However, the threat of 50% to 250% tariffs called for in the Auxin petition is freezing gigawatts of solar projects across the country as developers and manufacturers fear they could set solar power back years in terms of cost competitiveness. With no readily available alternative PV supply, solar power adoption over the next two years could be cut in half.

This inquiry, which could lead to retroactive tariffs that businesses have no means of estimating at present, is creating great uncertainty for the solar industry across the United States. We therefore recommend that the inquiry be expedited and a preliminary determination be made as soon as possible to limit the length of time such uncertainty lingers over the industry.  If Commerce makes a positive determination—finding evidence of circumvention—  Anti-Dumping/Countervailing Duties as high as 250% could be applied retroactively to all PV cells and panels that were imported from the countries in question since the initiation of the inquiry and potentially even earlier. This possibility has effectively frozen all imports of PV cells and panels from these countries, which account for more than 80% of PV panel imports and 54% of the solar panels used to meet domestic demand.

Just over a month into the investigation, the American solar industry is already facing significant challenges. A recently released survey of more than 700 solar companies found that 83% of respondents were experiencing delays or cancellations from their PV suppliers. A project-level survey found that more than 50 gigawatts of new solar projects are currently canceled or delayed. Modeling suggests that these cancellations and delays could cost the industry more than 100,000 jobs and increase CO2 emissions by an additional 364 million metric tons of CO2 between now and 2035, which is the equivalent emissions of 97 coal-fired power plants. Indeed, in a recent report the North Indiana Public Service Corporation (NIPSCO) projected delayed retirement of coal plants due to expected delays of solar development as a result of this investigation.

Vote Solar strongly supports the domestic solar manufacturing sector, but the tariffs called for in the Auxin petition would not benefit the industry in any substantially positive way. First, it is important to note that many domestic solar panel manufacturers produce solar modules using PV cells imported from the affected countries and would be harmed by duties ranging up to 250%, greatly increasing the cost of both domestic and imported PV modules. Secondly, the majority of solar manufacturing jobs in the U.S. are actually involved in the production of mounting, racking, trackers, and other balance of system components, rather than the solar modules themselves. Instead of freezing imports, incentives that lift all boats, like the manufacturing and solar tax credits in the Build Back Better Act, are a much more effective way to support domestic manufacturers and the American worker. Even so, factories cannot be built overnight; the expansion of the domestic solar manufacturing sector will take years, and in the meantime, we cannot afford to wait. 

We therefore respectfully request that the Department of Commerce expedite making a preliminary determination, and that this determination take into account the larger impact on American jobs and the Administration’s ambitious climate goals. Finally, we continue to urge swift passage of the Build Back Better Act, which would have a real, positive impact on domestic manufacturing and get the country back on track to meet your climate targets.

Sincerely,

Sachu Constantine
Executive Director
Vote Solar