President Joe Biden’s push to blunt the impact of a trade dispute paralyzing much of the nation’s solar industry drew swift condemnation from companies pushing to manufacture panels in the US.
Biden invoked emergency authorities to impose a two-year freeze on new tariffs for solar panels imported from four Southeast Asia nations, neutralizing a threat of retroactive duties that had chilled renewable project construction nationwide. At the same time Monday, he used sweeping powers under the Defense Production Act to support US-made solar panels and other domestic clean-energy manufacturing.
The efforts are aimed at boosting oft-competing political priorities: combating climate change and nurturing domestic solar manufacturing that has struggled to compete with cheap imports. The market’s reaction was decidedly mixed. Shares of Chinese-panel makers jumped along with America solar developers that depend on low-cost equipment from Asia. US manufacturers slammed Biden’s move, saying it does more to bolster solar panel making in China than in the US.
“Today’s proclamation directly undermines American solar manufacturing by giving unfettered access to China’s state-subsidized solar companies for the next two years,” Samantha Sloan, vice president of policy for First Solar Inc., said in an emailed statement. “This sends the message that companies can circumvent American laws and that the US government will let them get away with.”
Chinese solar panel makers gained, with Longi Green Energy Technology Co. rising 6.1% in Shanghai while Jinko Solar Co. jumped 8.2% and Trina Solar Co. added 6.3%. US companies that depend on cheap panels from Asia also rose, led by Sunrun Inc., which gained as much as 15%.
The threat of tariffs stemmed from the Commerce Department’s investigation into whether Chinese companies are circumventing decade-old duties by assembling solar cells and modules in Cambodia, Malaysia, Thailand and Vietnam, countries which constitute about 80% of annual panel imports into the US. Manufacturers in the four targeted nations had largely halted shipments to the US, stalling solar projects and prompting at least one utility to warn it would keep a coal plant operating longer than planned.
At issue are anti dumping and countervailing duties imposed against China a decade ago to offset subsidization and predatory pricing. The Commerce Department is set to issue preliminary findings in the case by late August.
Mamun Rashid, the chief executive officer of Auxin Solar Inc., the California-based panel maker that prompted the trade probe, condemned Biden’s action.
“President Biden is significantly interfering in Commerce’s quasi-judicial process,” Rashid said in an emailed statement. “By taking this unprecedented—and potentially illegal—action, he has opened the door wide for Chinese-funded special interests to defeat the fair application of US trade law.”
Biden is invoking emergency authority under nearly century-old US law, while the Commerce Department case is proceeding on a parallel track, a senior administration official told reporters. Under federal trade law, the president can direct duties to be suspended by declaring “an emergency to exist by reason of a state of war or otherwise.”
US solar developers, now heavily reliant on cheap, imported panels, cheered the president’s plan, saying it would spur renewable power projects while delivering a much-needed boost to domestic manufacturing. Heather Zichal, head of the American Clean Power Association, called it “a bold act of leadership” that “recognizes the immediate need to protect middle-class American jobs” while promoting US energy independence.
Biden’s action also drew rare near-unanimous praise from environmental groups, including mainstream conservationists as well as progressives who’ve criticized the president for being too timid in the fight against climate change.
Biden’s executive action follows days of brainstorming by administration officials over how to revive solar and power storage projects hampered by a Commerce Department trade investigation that prompted some exporters to halt panel shipments to the US. Although the president is not directly injecting himself in the case — meant to be a quasi-judicial proceeding free from political interference — his decision to waive new duties for two years effectively blunts the tariff threat in the short term, giving time for US manufacturing to ramp up.
The White House is also seeking to use the federal government’s purchasing power to help support American clean energy manufacturers. Biden is directing the federal government to apply domestic content standards when it procures solar systems, including US-manufactured solar photovoltaic components, and use special supply agreements to allow domestic clean electricity providers to more quickly sell their products to the government.
Biden’s manufacturing boost is anchored by action under the 72-year-old Defense Production Act, the same authority wielded by President Harry Truman to make steel for the Korean War and Donald Trump to spur mask production to battle the spread of coronavirus. Biden is authorizing the Department of Energy to use the law to rapidly expand American manufacturing of solar panel parts, building insulation, heat pumps and other gear, according to a White House fact sheet. Power transformers and equipment for making and using fuels generated by electricity also will be targeted, the White House said.
The Defense Production Act move will catalyze finance for clean energy manufacturing including loans and grants, a senior administration official said.
At least some of the funding is likely to be made available through an existing Energy Department program, which has more than $40 billion in loans and loan guarantees available and is being revived by the Biden administration. A spokesman for the program didn’t immediately respond to a request for comment.
Presidents dating back to George W. Bush have tried to marshal US solar panel making with a mix of short-lived incentives and punishing trade barriers that at times spurred retaliation instead of a manufacturing renaissance. At one point, there were some 75 major solar parts factories in the US, but most have since shuttered.
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