The US just made a big decision about Chinese solar – here’s what it means

The US Department of Commerce (DOC) has determined that four out of eight Chinese solar companies that it’s been investigating are “attempting to bypass US duties by doing minor processing in one of the Southeast Asian countries before shipping to the United States.” Here’s what it means for the US solar industry.

The DOC found that the four Chinese companies that attempted to circumvent US duties by processing in Southeast Asia are:

• BYD Hong Kong, in Cambodia
• Canadian Solar, in Thailand
• Trina, in Thailand
• Vina Solar, in Vietnam

The DOC findings are preliminary, and the agency will conduct in-person audits in the coming months. The DOC also noted that a ban is not going to be implemented on products from Cambodia, Thailand, and Vietnam:

Companies in these countries will be permitted to certify that they are not circumventing the [antidumping duty (AD) and countervailing duty (CVD) orders], in which case the circumvention findings will not apply. 

The DOC also notes:

Further, some companies in Malaysia, Thailand, and Vietnam did not respond to Commerce’s request for information in this investigation, and consistent with longstanding practice, will be found to be circumventing.

As Electrek reported in mid-May, the DOC launched an investigation of whether Southeast Asian solar cell manufacturers are using parts made in China that would normally be subject to a tariff.

That investigation destabilized the US solar industry, which relies on solar module imports to meet growing demand. The majority of the US solar industry then asserted that the DOC investigation would harm the US solar industry and wanted the investigation dismissed.

On June 6, President Joe Biden waived tariffs for 24 months on solar panels made in Southeast Asia in response to the investigation. He also invoked the Defense Production Act to spur on US solar panel and other clean energy manufacturing. That way, domestic production could be sped up without interfering in the DOC investigation.

The DOC today asserted that Biden’s presidential proclamation provides US solar importers with “sufficient time to adjust supply chains and ensure that sourcing isn’t occurring from companies found to be violating US law.”

But Abigail Ross Hopper, president and CEO of the Solar Energy Industries Association (SEIA), didn’t see it that way. She said in a statement:

The only good news here is that Commerce didn’t target all imports from the subject countries. Nonetheless, this decision will strand billions of dollars’ worth of American clean energy investments and result in the significant loss of good-paying, American, clean energy jobs. While President Biden was wise to provide a two-year window before the tariff implementation, that window is quickly closing, and two years is simply not enough time to establish manufacturing supply chains that will meet US solar demand.

This is a mistake we will have to deal with for the next several years.

George Hershman, CEO of SOLV Energy, the US’s largest utility-scale solar installer, also wasn’t pleased about the DOC’s announcement. He said in an emailed statement:

After years of supply chain challenges and trade disruptions, I remain concerned that the Commerce Department chose a path that could jeopardize the solar industry’s ability to hire more workers and construct the clean energy projects needed to meet our country’s climate goals.

The upside is that Commerce took a nuanced approach to exempt a number of manufacturers rather than issuing a blanket ban of all products from the targeted countries. While it’s positive that companies will be able to access some of the crucial materials we need to deploy clean energy, it’s still true that this ruling will further constrict a challenged supply chain and undercut our ability to fulfill the promise of the Inflation Reduction Act.

Photo: Tom Fisk on Pexels.com

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