Here’s how the new US protectionism movement is backfiring the US solar industry [Update]

The US Department of Commerce (DOC) is investigating whether solar cell manufacturers in Southeast Asia use parts made in China that are normally subject to tariffs. A bipartisan group of senators today joined most of the US solar industry in emphasizing that the DOC investigation will destroy the solar business, as they depend on imports of solar modules to meet rising demand.

May 2 Twenty-two senators today issued a letter to President Joe Biden asking him to expedite the DOC’s investigation into imported solar panels and cells from Malaysia, Vietnam, Thailand and Cambodia. The bipartisan group wrote:

The start of this investigation has already caused massive disruption to the solar industry, and will severely hurt solar companies and American workers and increase costs for American families for as long as it continues.

We strongly urge your management to quickly review the case and make an urgent initial decision. This decision should take into account significant policy implications and retroactively reject the petitioner’s application.

full message It can be read here.

April 27: to me A new analysis was conducted last week and released today by the Solar Energy Industries Association (SEIA), the forecast for solar installation for 2022 and 2023 is reduced by 46% due to the DOC realization. The case will result in a reduction of 24 gigawatts of solar capacity planned over the next two years, which is more solar capacity than the industry installed in all of 2021.

The Environmental and Social Impact Assessment (SEIA) also collected more than 700 survey responses to capture project-level data and the impact businesses feel.

Four-fifths of survey respondents – 83% – who buy or use PV modules report canceling or delaying the supply of modules.

318 utility-scale projects representing 51 gigawatts of solar capacity and 6 gigawatt hours of attached batteries have been canceled or postponed. $52 billion of utility-scale investments are at risk.

SEIA President and CEO Abigail Ross Huber said:

This issue is destroying clean energy, needlessly killing American companies and workers in its wake.

Trying to help the US solar industry, but hurting it instead

April 5: DOC’s investigation of CSPV assembly in four Southeast Asian countries could take up to a year, and suppliers have indicated they may halt shipments from those countries to the United States until a final ruling.

Auxin SolarThe California-based solar panel manufacturer whose website states it is “the longest-running CSP producer in the USA,” petitioned the US Department of Commerce in February for an investigation into anti-dumping fraud for solar cells from Cambodia, Malaysia, Thailand, and Vietnam.

Auxin claims that tariffs on solar energy imports will boost domestic manufacturing. But the majority of US solar companies, as well SEIAopposes this investigation, because the United States relies on imports of solar modules to meet rising demand.

So SEIA conducted a survey of solar companies to measure the impact of a DOC investigation on their business.

As of 8 a.m. ET today, 74% of 200 companies I mentioned the survey that shipments of their paintings have already been canceled or delayed. According to SEIA, 84% of all solar modules in the United States
The imports come from the four countries being investigated, and there is insufficient non-Chinese capacity elsewhere to cost-effectively supply US demand.

Furthermore, all surveyed solar companies projected the expected damages across the value chain, and 100% of domestic manufacturers in particular expect the investigation in Southeast Asia to have severe or devastating impacts.

The results of this survey come at a time when the industry is facing unprecedented supply chain challenges and increasing prices. In 2021, solar equipment costs rose 18%, and the threat of previous business actions caused delays and project cancellations, according to a report by SEIA and Wood Mackenzie.

A subsequent report by Wood Mackenzie found that fraud petitions could eliminate 16 gigawatts of panels from the US supply chain, which is two-thirds of all panels the US installed in 2021.

SEIA estimates that as a result of this petition, the solar industry will lose 70,000 out of 231,000 jobs.

Abigail Ross Huber, SEIA President and CEO, said today in an email statement:

We urge the administration to expedite this investigation and end this unnecessary barrier to a clean energy future.

We said tariffs weren’t the right way to stimulate manufacturing, and that it would take time and policy commitment to move manufacturing into the United States on the scale needed.

The countries mentioned in the petition have been reliable trading partners, and we need their products, at least in the short term, as we strive to establish a strong and sustainable industrial presence here in America.

Take Electric

This DOC investigation is well-intentioned and poorly executed. US tariffs on products made abroad will do no good if not enough of these products are manufactured to supply demand domestically.

It’s great that Auxin Solar makes CSPV cells, but can they provide enough for every US solar company that needs it?

American manufacturing of solar cells and panels has to begin, but it’s a large and important process that will take years to build.

As a result, much-needed solar industry growth could come to a halt, and then everyone else lose out.

The Biden administration needs to reconsider this investigation, as it is setting its own climate change goals in full swing and hampering a vital solar industry.

Read more: A new IPCC report says wind, solar and electric vehicles can prevent catastrophic climate change

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