Northern California solar industry cautious about letting in more Chinese panels in tariff break

A decision by President Biden to suspend tariffs on imported solar panels made in China for two years, even as the Commerce Department investigates the Asian powerhouse for possible trade deal violations, doesn’t sit well with several company executives solar panels and the State of California.

They said the removal of protective tariffs comes now as U.S. solar companies struggle to find labor to install panels and face adverse changes in tax regulations.

Administration officials said allowing more solar components made in China would help domestic industry by increasing the supply of critical parts needed for solar installations. The Commerce Department investigation, they added, is rooted in protecting domestic industry.

But California Governor Gavin Newsom recently sent a letter to Commerce Secretary Gina Raimondo warning that the investigation jeopardizes a state plan to quickly install new solar panels to power 2.5 million households, reported the Washington Post.

S&P Global Market Intelligence said Congress is also considering tax credits for the domestic solar industry because “the United States today has no active ingot, wafer, or cell capacity and little assembly of panels despite growing demand”.

In the Bay Area, Mamun Rashid, founder of Auxim Solar, a small solar panel maker in San Jose, asked Commerce to launch the investigation in a lawsuit filed earlier this year. Since then, it has become the target of backlash from green energy and environmental advocates. He said the outpouring of responses from the solar industry supports his argument that Chinese products are illegally dumped on the US market.

“There is absolutely no reason to stop product shipments, or stop or delay projects, if there is no fraud. I didn’t expect to hear about delayed projects and I didn’t expect to see all this vitriol,” Rashid said.

Rashid told the Business Standard, “President Biden is significantly interfering with the quasi-judicial process of Commerce… By taking this unprecedented and potentially illegal step (Biden) has opened the door for special interests funded by China to frustrate the fair application of US commercial law. .”

A majority of US solar companies have warned that if the investigation finds dumping by the Chinese, the US could impose retroactive tariffs of up to 240%. The tariffs envisaged by Commerce could exceed 50% of the price of the solar panels.

According to the Associated Press, such a dramatic increase in levies would drive up panel prices and jeopardize half of the solar projects planned in the United States this year, according to an industry survey, and could also result in thousands of dismissals.

According to Timothy Brighton, lawyer for US solar manufacturers, one of the reasons for expanding the investigation to Southeast Asia is that China has moved some solar manufacturing processes to Thailand, Vietnam, Malaysia and in Cambodia. manufacturing. He claims it is to circumvent strict anti-dumping rules that limit imports from China.

Energy Secretary Jennifer Granholm said now is the time to act.

“At stake is the complete stifling of investment in (domestic solar) jobs and the independence that we seek as a nation to obtain our fuel from our own sources of production,” Granholm told the Senate committee. energy and natural resources. “I am deeply worried that we could achieve the goal of 100% clean electricity by 2035 if this is not resolved soon.”

State and utility stocks could bite more than tariffs

“One way to avoid Asia-related solar sourcing and supply issues is to buy American solar products from Canada – or as we have done – to get products from a company distributed via Singapore,” said Matt Smith, consultant at Solar. Works. Sebastopol serves Sonoma, Napa and northern Marin counties.

“We do not use solar components and parts from China, and do not expect to see any significant price changes or work-in-progress impact in the near term,” Smith said. “But the future is impossible to predict.”

Smith said that currently no rate-related fallout is expected affecting the company’s workflow, but there could be higher costs associated with having solar parts available on the road.

He said a potential California Public Utility Commission tax and ongoing Pacific Gas & Electric rate hikes could have a bigger effect on demand for photovoltaic (PV) systems.

The PUC’s proposal, which was last revised in May, is to tax solar users about $300 to $600 a year to help maintain the power grid.

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