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US freezes tariffs on solar components from Asia – pv magazine International

US freezes tariffs on solar components from Asia – pv magazine International

The White House announced a 24-month tariff exemption on solar modules made in Cambodia, Malaysia, Thailand and Vietnam, while citing the Defense Production Act as a way to speed up US production.

According to pv magazine USA

US President Joe Biden on Monday (June 6) ordered two emergency measures to boost the domestic solar industry. The first is a 24-month exemption from tariffs on solar modules manufactured in Cambodia, Malaysia, Thailand and Vietnam, which currently account for about 80% of US module imports. This is a direct response to the uncertainty that has prevailed in the industry as a whole since the Department of Commerce (DOC) announced on March 28 that it would launch an anti-dumping investigation into possible trade violations regarding imports of solar panels from Chinese companies working in Cambodia, Malaysia, Thailand and Vietnam, following a complaint from California-based Auxin Solar. The Commerce Department investigation reportedly led to the cancellation of hundreds of solar projects in the United States, as companies feared they would have to pay retroactive tariffs. This decision is therefore intended to ensure that the United States has access to a sufficient supply of solar modules to meet electricity generation needs while domestic manufacturing increases.

Indeed, Joe Biden invoked the Defense Production Act at the same time. Enacted in 1950, it allows presidents to order private companies to prioritize production of certain categories of products and to allocate materials, services and facilities for national defense purposes. The order has been invoked twice during the Covid-19 pandemic to require companies to produce hospital breathing apparatus and protective equipment. This time around, it aims to accelerate U.S. production across the solar supply chain and reduce global reliance on imported PV equipment and materials. The reports thus indicate that the aim of invoking this law is to increase the national solar generation capacity to 22.5 GW by 2024.

The solar industry applauds

The president’s action has already been hailed by solar energy advocates. Solar Energy Industries Association (SEIA) President and CEO Abigail Ross Hopper welcomed the move in a statement. “We applaud President Biden’s thoughtful approach to solving the solar supply chain paralysis,” she said. The President offers near-term greater security for businesses to resume rapid deployment, while harnessing the power of the Defense Production Act to prepare for the future. Today’s actions protect existing jobs in the solar energy sector, will lead to increased employment in this sector, and foster a strong manufacturing base for solar products here at home. While the Commerce Department’s investigation will continue as required by law, and we remain confident that the review of the facts will lead to a negative decision, the President’s action is a much-needed reprieve from this crushing investigation. industry”.

“Now that we have a reprieve from the destructive impacts of the DOC investigation, we look forward to working with the administration and our congressional allies to ensure the passage of policies that strengthen our national supply chain, such as the clean energy tax package currently under negotiation, which provides tax credits for advanced manufacturing and long-term tax incentives for renewables,” said Gregory Wetstone, President and CEO of the American Council on Renewable Energy (ACORE) in a press release.

Immediate impact of the DOC investigation

In the months following the announcement of the DOC’s investigation, SEIA lowered its forecast for solar installations for 2022 and 2023 by 46%, predicting that the case would lead to a 24 GW drop in planned solar capacity. over the next two years, more solar than the industry installed in all of 2021. Also according to a survey by the organization, 83% of respondents who buy or use modules reported cancellations or delays in their module supply contracts. In 13 states, 100% of respondents said their supply of modules was delayed or canceled. Thus, based on the voluntary reports, the responses told SEIA that a total of 318 large-scale projects, representing 51 GW of solar capacity and 6 GWh of battery storage, have been canceled or delayed. With such a loss of capacity, the SEIA estimated that the United States would emit an additional 364 million metric tons of carbon by 2035. The SEIA survey was based on the assumption of tariffs of about by 50 to 250%, following a positive verdict of the DOC investigation and a severe restriction of the supply of module imports from Cambodia, Malaysia, Thailand and Vietnam.

External pressures

Since the probe was announced, the Biden administration has been stuck between a rock and a hard place, pitting Biden’s goals to decarbonize the US electric grid by 2035 and reduce national greenhouse gas emissions against each other. 50-52% by 2030, compared to 2005 levels, the existing political pressure to oppose economic practices and dependence on Chinese products. The DOC and the Biden administration have been inundated with pleas from renewable energy advocates and politicians to drop the investigation. To date, 22 senators and 19 state governors have formally requested the DOC to issue a quick and negative preliminary ruling.

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