Biden Seeks to Bolster Solar Manufacturers With Tax and Trade Moves

The Biden administration is initiating a suite of policies it says will help foster a deeper domestic supply chain for solar panels, following pleas from US manufacturers confronting a surge of tariff-free imports.

Bloomberg
Updated17 May 2024
Biden Seeks to Bolster Solar Manufacturers With Tax and Trade Moves
Biden Seeks to Bolster Solar Manufacturers With Tax and Trade Moves

The Biden administration is initiating a suite of policies it says will help foster a deeper domestic supply chain for solar panels, following pleas from US manufacturers confronting a surge of tariff-free imports. 

The measures announced Thursday include expanded tariffs, tax policy guidance that could boost demand for some US-made solar equipment and promises of heightened vigilance for signs of unfair trade. 

“We’re taking these new actions this week to support US clean energy industries to both make sure we’re doing our part to reduce emissions and to make sure our competition with China is actually fair,” said John Podesta, senior adviser to the president for international climate policy.

The effort presents a response to more than a year of appeals from solar companies that said tariff exemptions, an uptick in cheap foreign panel imports and federal tax policy decisions were undermining incentives in the Inflation Reduction Act meant to support domestic manufacturing and erode China’s green technology dominance. 

Although the law triggered a wave of promised investments in American solar manufacturing, several marquee projects have since been quietly shelved or slowed. It’s not clear whether the new policies will be sufficient to drive domestic manufacturing, not just of solar panels but also their key ingredients, including cells, wafers, ingots and polysilicon. 

Read More: Biden’s Solar Factory Boom Slows as Imports Flood Market

The announcement came as President Joe Biden projects a tough-on-China election-year stance, imposing a range of sweeping tariff increases on imports from the country that has come to dominate production of solar panels and their components — even though the technology was invented in the US. Some manufacturers moved to take action on their own last month, formally petitioning the US government to impose new duties on solar imports from four Southeast Asian nations, arguing they are unfairly priced below cost and benefit from illegal subsidies.

The Biden administration said it will swiftly end a policy that allows two-sided, or bifacial, solar panels to avoid so-called Sec. 201 safeguard tariffs currently set at 14.25%. The exclusion was first created under President Donald Trump — then extended under Biden. Initially cast as a modest but essential safety valve to ensure large, utility-scale solar projects could procure the gear, it’s now become a widely used exception. Trump sought to eliminate the exemption in 2020, but lower courts blocked the move; a federal appeals court ruled last November the government could make the change after all. 

Read More: US Solar Manufacturing Climbs Yet Losses Mount, Review Finds

The administration’s move Thursday was heralded by panel-making advocates. Mike Carr, head of the Solar Energy Manufacturers for America Coalition, praised Biden for closing a “loophole” he said had weakened the 201 tariffs to the point of irrelevancy. 

But American Clean Power Association spokesman Phil Sgro said the pivot “undermines business certainty” for solar developers and energy companies that had inked long-term commercial commitments based on the exclusion. 

The Biden administration also is raising the prospect of allowing more solar cells to enter the US without being hit by Section 201 tariffs. Some manufacturers argued there isn’t a sufficient domestic supply of those components to support US panel making today. They had urged the president to quadruple the existing 5-gigawatt tariff-free quota for those components in the meantime, while US cell production capacity climbs.

The administration is stopping short of that but said in a White House fact sheet that it is committed to pursuing a 7.5-gigawatt increase if the number of imported cells reaches the tariff-free threshold. 

“This move provides an important bridge for module producers to access the supply they need while the United States continues to advance solar cell manufacturing,” said Abigail Ross Hopper, president of the Solar Energy Industries Association.

The administration also is promising to be more vigilant in watching for signs of unfair trade and scrutinizing panels imported into the US under a tariff moratorium Biden announced nearly two years ago. The Energy and Commerce departments “will closely monitor import patterns to ensure the US market does not become oversaturated and will explore all available measures to take action against unfair practices,” the White House said in a fact sheet. 

Read More: Asian Solar Imports Subject of New US Commerce Probe

The government already concluded Chinese manufacturers were circumventing longstanding tariffs by assembling solar modules in the four Southeast Asia countries — Cambodia, Malaysia, Thailand and Vietnam. Biden waived anti-circumvention duties for many of the solar cells and modules imported from those nations, but will not extend the two-year tariff holiday when it expires in early June. 

The administration also is vowing the US Customs and Border Protection “will vigorously enforce” a requirement that equipment imported under the moratorium is utilized by early December — or else duties must be paid. That includes requiring importers to provide certifications with “detailed information” proving the solar modules have been deployed on time, the White House said. 

This article was generated from an automated news agency feed without modifications to text.

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