A Commerce Department investigation into solar panel supplies has put hundreds of major and utility-scale solar power projects around the U.S. on hold.
Investigators are looking into whether Chinese manufacturers are avoiding duty rules on their solar panel imports by funneling them through Malaysia, Thailand, Cambodia and Vietnam. Those four countries are responsible for more than 80% of solar panel imports, according to an industry association.
Solar energy trade associations have come out in opposition to the Commerce investigation, alleging installation forecasts for this year and next are down 46% as a result.
Developers around the country are saying they have had to put projects on hold.
If Commerce finds violations, it can assess duties retroactively to the start of the investigation last month, which would add significant costs to importers. One developer said the retroactive tariffs could potentially reach as high as 240%. As a result, the risk is too high to order panels.
Trade association leaders have said the investigation has the potential to eliminate a decade’s worth of growth in the solar industry.
The Biden Administration has set a goal for the power sector to end greenhouse gas emission by 2035, and solar is a major component of that plan. The industry has expanded significantly in the last several years, and panel costs have gone down.
Since the four countries involved in the investigation account for 80% of panel supply, retroactive tariffs would significantly increase costs and add stress to the supply chain, slowing industry expansion.
Twenty-one U.S. senators from both parties sent a letter to the Administration urging a quick resolution to the problem, stating that 83% of U.S. solar companies have received notices of canceled or delayed supply. The senators estimate the supply constriction as a result of the inquiry could result in the loss of more than 100,000 jobs.
Testifying before a Senate committee last week, Energy Secretary Jennifer Granholm expressed frustration at the investigation and said “the complete smothering of the investment and the jobs and the independence” in generation sources is at stake.
If it plays out as it normally would, the investigation could last for months. An initial finding is expected by late August. Industry advocates are pushing for an accelerated process. (Source)