Published on March 29, 2022 by Kim Riley

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A new plan to determine whether imports of solar cells and/or panels from certain Southeast Asian countries are circumventing tariffs by the U.S. Commerce Department on solar cells and panels from China could reduce solar imports to the United States and undermine President Joe Biden’s climate goals, major energy industry stakeholders said on Monday.

“The initiation of these inquiries will have a harmful and disruptive impact on the solar supply chain, resulting in increased costs, project delays and job losses,” said Tom Kuhn, president of the Edison Electric Institute (EEI), which represents the nation’s investor-owned electric companies. “Ultimately, this will impede the nation’s clean energy transition and increase costs for electricity customers.”

Kuhn said that affordable solar energy is essential for the energy industry to achieve its carbon-reduction goals.

“We will be requesting that the Department of Commerce conduct an expedited review so the investigation does not drag on for months, and to avoid further harm and the delay of our nation’s clean energy transition that is essential to customers,” he said Monday.

According to a Commerce Department spokesperson, the decision to launch its investigation is in response to a Feb. 8 request from Auxin Solar Inc., a California-based solar panel manufacturer.

Mamun Rashid, CEO of Auxin Solar, said he’s grateful that the Commerce Department will investigate what he calls “pervasive backdoor dumping” of solar panels by China that are injuring U.S. solar producers. 

Commerce officials agree a potential problem exists and in a March 25 memo said that Auxin Solar had provided information indicating that solar companies operating in the four countries are subsidiaries of large Chinese producers and that products made there would be subject to U.S. countervailing and anti-dumping duties if made in China.

“Auxin properly alleged the elements necessary for a circumvention determination,” according to the memo.

“Commerce will conduct an open and transparent investigation to determine whether circumvention is occurring,” the spokesperson wrote in an email sent to Daily Energy Insider on Tuesday. “This inquiry is just a first step — there has been no determination one way or the other on the merits, and no additional duties will be imposed at this time.”

Earlier today, John Ketchum, who is president and CEO of NextEra Energy Inc. and president of NextEra Energy Partners LP, called the Commerce Department’s decision to grant Auxin’s request to investigate disappointing.

“We believe it has no merit,” Ketchum said in a statement. “However, we are optimistic that the investigation will be resolved favorably and that no additional antidumping and countervailing duties tariffs will be put in place.”

Ketchum noted that while some of NextEra Energy’s solar and storage projects could be adversely impacted by the disruption the department’s decision is expected to cause, “we will work closely with our suppliers and customers to assess the potential impacts of this investigation and remain confident in our ability to arrive at acceptable mitigation measures.”

The American Clean Power Association (ACP) also isn’t happy with Commerce’s planned investigation, which it said will lead to new duties on solar panels and cells assembled by America’s allied trading partners from Southeast Asia.

“The Department of Commerce’s decision… signals that the Biden administration’s talk of supporting solar energy is empty rhetoric,” said Heather Zichal, chief executive officer of ACP. “If its commitment to a clean energy future is real, the administration will reverse this decision immediately.”

Zichal said up to 80 percent of the solar panel supply to the U.S. could be choked off as the department’s investigation proceeds. And without a reliable supply of solar modules coming in, project construction will grind to a halt, in turn impacting the 230,000 Americans who work in the solar industry.

“Every day this investigation hangs over the solar community is a day of lost jobs and postponed solar projects critical to the administration’s climate agenda,” added Zichal. “We’re confident that the facts will demonstrate that this case… has no merit, and that Commerce will uphold the decade-long precedent regarding the origin of solar cells and modules that the petitioner is desperately and repeatedly attempting to upend.”

Abigail Ross Hopper, president and CEO of the Solar Energy Industries Association, added that Auxin Solar’s “meritless petitions” could result in tariffs on the solar industry ranging from 50 percent to 250 percent. Such additional tariffs, she said, will cause the loss of 70,000 American jobs, including 11,000 manufacturing jobs.

“President Biden has been clear that the best way to grow domestic manufacturing is to create a policy environment that encourages private investment,” Hopper said on Monday. “This decision directly contradicts that goal — more tariffs are not the answer.”

The Commerce Department’s probe also will upend the renewable energy industry at the worst possible time, said Gregory Wetstone, president and CEO of the American Council on Renewable Energy.

“The agency’s trade investigation creates uncertainty that will chill new investment and cause layoffs in the nation’s solar energy sector,” Wetstone said. “At a time when the renewable energy industry is working incredibly hard to accelerate deployment to meet the Biden administration’s climate goals and avert the worst impacts of climate change, we need the federal government working in partnership with an all-hands-on-deck effort. 

“Unfortunately, this investigation will needlessly slow economic growth, raise energy costs for American families, and put our climate at greater risk,” he said.

EEI’s Kuhn also pointed out that electric companies are supportive of developing domestic production of clean energy technologies, and said its member companies look forward to working with the Biden administration to ensure a balance between clean energy progress and trade concerns.