Over the last year, the threat of tariffs has been one of the most significant headwinds in the deployment of solar in the United States. Solar deployments ground to a near-halt as industry-wide uncertainty unfolded following the Department of Commerce’s (DOC) March 28 announcement that it would launch an investigation into alleged antidumping violations by Chinese solar manufacturers.
Goods found in violation could have tariffs as high as 50% to 250% of the cost of goods, creating an untenable amount of risk for project developers. The Energy Information Administration said about 20% of utility-scale solar projects, sized 1 MW and up, were delayed in the first half of 2022, largely due to module supply shortages related to the investigation, as well as to COVID-19 slowdowns and goods seizures from the Uyghur Forced Labor Prevention Act (UFLPA).
The investigation was ignited by a petition filed by California-based solar module manufacturer Auxin Solar requesting that the DOC review solar panel imports from Chinese companies working in Cambodia, Malaysia, Thailand and Vietnam, announcing that it was launching an antidumping investigation into those companies. About 80% of the US supply of crystalline silicon solar modules come from the four nations. The Solar Energy Industries Association cut its forecast for solar installations in 2022 by 46% immediately following the announcement of the investigation.
In June, the Biden Administration placed a two-year moratorium tariff on solar goods, partially reopening module supply to the U.S. The executive order was celebrated by the solar industry, but damage had already been done. Even in light of the moratorium, research firm Wood Mackenzie lowered its 2022 installation projections by 6.3 GW from pre-investigation announcement forecasts.
DOC announced that the determination, originally expected to be made on November 28, 2022, has been pushed to December 1, 2022. It the final decision was also pushed back three days to May 1, 2023.
The deadline extension was requested by Auxin Solar. Auxin said Commerce needs to “fully develop and complete records of the inquiries.” The company said Southeast Asian PV suppliers have “misled lawmakers by failing to provide Commerce with all of the available information in a timely manner to quickly reach a preliminary conclusion.”
Tariffs related to AD/CVD violations have historically been high. The current AD rate for Chinese companies found in violation can reach 238.95% of the cost of goods. Dating back to 2012, solar tariffs on Chinese antidumping have ranged from less than 1% to over 100%. In 2017-18, major PV suppliers Trina Solar saw 92.5%, Risen Energy 100.79%, Canadian Solar 95.5%, JinkoSolar 95.5% tariffs imposed.
The original AD and CVD investigations on imports of crystalline silicon PV products were launched in November 2011. The US International Trade Commission determined that domestic producers were being materially hurt by the imports, and the Commerce Department in December 2012 imposed import tariffs. In 2019, the department extended both import tariff orders.
“For years, Chinese solar producers have refused to fairly price their products in the U.S. and have gone to significant lengths to continue undercutting American manufacturers and workers by establishing circumventing operations in countries not covered by those duties. Fair trade and enforcement of our trade laws are essential to rebuilding the American solar supply chain and making Solar in America again,” said Auxin Solar.
U.S. solar developers and Southeast Asian solar goods providers alike will hope the May 2023 determination will find goods not in violation. The ongoing saga highlights the fragility of global supply chains and contextualizes the U.S. push to boost domestic solar manufacturing.
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