Seven American solar companies are now retaliating against what they see as a serious danger to the country’s attempts to develop its own manufacturing sector.
On Wednesday, businesses from Qcells, First Solar, and Swift Solar among others requested that the Biden administration impose tariffs on solar cells originating from four Southeast Asian nations. Chinese-owned businesses that operate in Thailand, Vietnam, Malaysia, Cambodia, and other countries are allegedly illegally undercutting the US solar industry.
The proposal comes after the region saw an extraordinary influx of goods the previous year. According to S&P data, those four nations together accounted for about 80% of US solar panel imports in the second half of 2023. Solar panel inventories currently span eighteen months, and costs have dropped by half in the last year to as low as 10 cents per watt. Panels are so inexpensive in Germany that garden fences are lined with them.
President Joe Biden is facing a difficult moment as a result of the US solar businesses’ petition. He has emphasized during the campaign trail how his initiatives to address the climate catastrophe are producing jobs. Thanks in large part to tax benefits included in the Inflation Reduction Act, more than $111 billion in investment has been announced for renewable energy manufacturing projects alone.
The US solar industry, however, claims that without further protection from China, whose investment is surpassing US investment by hundreds of billions of dollars annually, their companies will not be able to compete. Citing the slump in solar prices, Massachusetts-based CubicPV halted plans for a new facility and slashed in half its workforce in February.
According to industry analysts, over 80% of the world’s solar production comes from China, with the majority of the remaining production coming from Southeast Asian countries and being financed by Chinese corporations.
Direct imports of solar panels from China are prohibited by US trade rules. However, the Commerce Department found last year that five Chinese businesses were exporting goods via Southeast Asian nations in order to avoid paying high tariffs at the US border. The Biden administration decided not to proceed with tariffs in spite of the results since they will be reimposed in June upon the expiration of a two-year remission. Initially, the purpose of that waiver was to allow the United States to continue increasing solar power in order to meet its climate targets while local manufacturers were building up their businesses.
That might happen as a result of the US solar companies’ petition, which is referred to as an anti-dumping and countervailing tariff complaint. The US Commerce Department and International Trade Commission will begin a year-long probe against it. The agencies will examine Chinese government subsidies as well as solar subsidies in Southeast Asian nations. The probe will assist in figuring out whether solar panels were sold in the US for less than what it cost to produce them.
China, meanwhile, has downplayed the worries.
