The U.S. is currently holding hundreds of large-scale solar power plants as it awaits the outcome a federal investigation into possible trade violations in relation to solar panels purchased from Asian suppliers.
Department of Commerce investigators are trying to find out if Chinese manufacturers are evading U.S. duty regulations on solar imports from China. They funnel components through affiliates located in four countries nearby aEUR” Malaysian, Thailand, Cambodia, and Vietnam, where panels are assembled for export to America.
According to the American Clean Power Association, the four countries that are the focus of this investigation account for more then 80% of all solar panel imports.
According to the Solar Energy Industries Association (SEIA), a Washington-based trade association, solar installation forecasts for 2022-2023 have fallen by 46% due to concerns about the inquiry aEUR,” though other pressures, such as pandemic supply chain problems, could also play a part.
According to the group, there will be a decrease of 24 gigawatts of planned solar capacity over the next two year aEUR” less than what the industry has installed during all of 2021.
Recent state climate policies and incentives in Maine have led to a surge in solar development. Two years ago, long rows of solar arrays were built on dozens of Maine’s rolling hills.
Some developers now say that they must push the pause button for new construction.
Leo Azevedo (procurement manager at BNRG in Ireland) showed off a recently energized 9 megawatt array that can supply power to more than 1,500 homes. Mainers will pay less for electricity than they are currently paying due to the low-cost solar panels sourced from Southeast Asia.
Just across the long fence is a larger project that would provide electricity to Maine residents at a better price.
Azevedo states that “most of the panel manufacturer aren’t taking orders right now.”
Azevedo states that if the Department of Commerce finds any violations during its investigation, it can assess duties retroactively to April aEUR.” This leaves importers with higher bills than they expected when they placed their order.
Rafael Benavides (a Commerce press secretary) said that the inquiry is a quasi-judicial procedure designed to “ensure a level playing ground for U.S. workers and businesses.” Investigators will determine whether South Asian manufacturers are subjected to existing import taxes, based on their relationship to Chinese suppliers, and, if yes, at what rate each manufacturer should be taxed.
Azevedo stated that retroactive tariffs up to 240% are possible in the worst-case scenario. We don’t really know what it is. There’s too much risk in ordering panels now. That’s not the end of it.
A recent survey of the industry found that most large-scale U.S. developers of solar energy said uncertainty caused delays and cancellations. This puts billions of dollars worth of carbon-free power capacity at risk.
Abigail Ross Hopper is the president and CEO at SEIA. “The investigation alone has wiped out a decade worth of solar job growth.” “It’s stunning.”
She claims that this was supposed be the moment of the green economy in the sun.
She says, “We have a president that believes in climate change and addressing it. We also have a House of Representatives and Senate that are controlled and controlled by Democrats.” “And we can do so much to address many of the problems that we face.”
It is not yet clear what the true extent of the problem is. A utility in Indiana said it had to delay several solar projects, and will continue to run a coal-fired power plant for years more than originally planned.
The cost of solar panels has dropped significantly in the last decade. This was a rare bright spot for President Obama whose climate ambitions were largely thwarted by Washington’s political realities.
Biden established a goal to end greenhouse gas emissions from the power sector by 2035 AEUR,” a target that the White House wanted to achieve through dramatic increases in renewable energy capacity and carbon storage and storage technology.
However, if the government decides that retroactive taxes be imposed on primary sources of solar panel production in the country, it will likely increase the cost of the supply chain and cause a significant impact on industry growth.
A bipartisan group made up 21 senators, who sent an open letter to Biden’s administration requesting that the president resolve the matter quickly.
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The senators stated that “Already, Commerce has initiated this investigation,” and that industry surveys have shown that 83% of U.S.-based solar companies reported being notified about canceled or delayed supply. If left unattended, cutting off the supply of cells and panels could result in the loss of more 100,000 American jobs, including 18,000 manufacturing jobs.
The Commerce Department inquiry seems to have exasperated some members of Biden’s administration.
On Thursday, Secretary Jennifer Granholm of Energy testified before the Senate Committee on Energy and Natural Resources. She suggested that the investigation poses an existential threat for the U.S. Solar industry.
Granholm stated that “at stake is the complete suppression of the investment, the jobs and independence we would seek as a nation in order to get our fuel from their own generation sources.”
“Solar industry advocates and representatives have raised these concerns to us,” stated Andrew Bates, White House deputy press secretary.
NPR was informed by a source familiar with the administration’s thinking that the White House is concerned about what the investigation will mean and has asked the Department of Commerce for swift action. However, NPR learned that the slowdown was ultimately due to an American company filing a legally protected claim.
As investigators try to understand the relationships between foreign manufacturers and Chinese suppliers, the investigation, which is designed to be immune from political pressures will take several months. Although a finding is expected by August, the solar industry and its political allies want a faster review.
NPR’s Commerce press secretary Benavides stated that although industry concerns are considered as part of an investigation’s damage assessment process they don’t influence the department’s inquiries and determinations.
He also said that there is no legal provision “that would permit us to consider political priorities and goals.”
Auxin Solar, a San Jose-based solar panel manufacturer, set the stage for this situation. The company filed a petition with Commerce Department in February alleging that Chinese companies were evading trade duties. These duties are meant to prevent foreign, state-subsidized businesses from dumping goods in the U.S. or undercutting American producers.
Mamun Rashid, CEO of the company, stated that “yes, there are doom-and-gloom scenarios out there.” “I have seen all the headlines.”
Many in the industry have condemned Rashid, but he insists that fair trade is fair trade. He says that if the Commerce Department decides the solar-panel playing fields need to be levelled, both industry and government will find a solution, including investing in domestic panel-making capabilities.
He says, “I believe the business models will have to be reassessed” “No one will walk away with hundreds of millions or billions-dollar businesses.”
However, for the moment, the sector’s recent surge seems to be slowing down, which puts some climate policy goals like Maine’s in doubt.
Leo Azevedo, procurement manager at the Maine solar plant, says that his company and its partners have designed projects in Maine and elsewhere that could collectively power tens to thousands of homes. They also plan construction jobs.
He says that there are 200-300 megawatts of power at risk in the next three year. That’s about jobs in North Carolina and Virginia, Ohio, Indiana. That’s a lot, and a lot cheap electricity that is in danger.
Adam Farkes, BNRG’s head of construction, adds, “As you see, the weather outside looks beautiful, but there isn’t much going on.” It is also a partner in the Augusta project. Farkes takes a sad look at the undeveloped 87-acre site, where preconstruction should begin now.
He says, “It seems counterproductive to have these climate goals and then at the exact same time you’re preventing us from building anything.” “We should be building.”
