If production ramps up as expected, the administration expects domestic solar module manufacturing to triple by 2024.
On June 6, 2022, President Joe Biden signed an order that will exempt Southeast Asian nations from any new tariffs on solar panels for two years in order to alleviate concerns about the crippling effects of an ongoing Commerce Department investigation.
The White House released a fact sheet stating that Biden would establish a “24-month bridge” for solar imports from Cambodia, Malaysia, Thailand and Vietnam by waiving tariffs “in order to ensure the U.S. has access to a sufficient supply of solar modules to meet electricity generation needs while domestic manufacturing scales up.”
Biden will also invoke the Defense Protection Act to drive U.S. manufacturing of solar panels and other clean energy technologies in the future, with the support of loans and grants. If production ramps up as expected, the administration expects domestic solar module manufacturing to triple by 2024.
In March 2022, the Commerce Department began its investigation into whether manufacturers of solar panel components in Southeast Asia are being used to circumvent U.S. tariffs on Chinese solar companies. The solar industry expressed concerns that the tariffs on these countries would be devastating for American solar projects, the hundreds of thousands of jobs they support and the United States’ clean energy and climate goals. Imports from the four countries account for about 80 percent of the panels expected to be installed in the United States this year, according to the American Clean Power Association industry group. The Solar Energy Industries Association (SEIA) determined that enforcement of the tariff would cause the cancellation or delay of over 300 projects, accounting for 51 gigawatts of solar capacity and 6 gigawatt hours of attached battery storage.
Biden’s move is welcome news to the solar industry. In a statement released June 6, SEIA President Abigail Ross Hopper praised the “thoughtful approach to addressing the current crisis of the paralyzed solar industry supply chain.” “The president is providing improved business certainty today while harnessing the power of the Defense Production Act for tomorrow,” she said. “Today’s actions protect existing solar jobs, will lead to increased employment in the solar industry and foster a robust solar manufacturing base here at home.”
The Commerce Department’s investigation is ongoing and its findings will apply once the two-year period is over. Lisa Wang, assistant secretary of Commerce for enforcement and compliance, stated, “In accordance with the president’s declaration, no solar cells or modules imported from Cambodia, Malaysia, Thailand and Vietnam will be subject to new anti-dumping or countervailing duties during the period of the emergency,” Wang said. “Existing duties on Chinese and Taiwanese imports of solar cells and modules remain in effect.”
About Duane Morris
Duane Morris has substantial experience aiding landowners and solar companies negotiate and develop solar projects, helping them stay in compliance with various regulations and litigating solar-related disputes.
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