Congress Votes to Reinstate Tariffs on Solar Panels from Southeast Asian Countries

Congress Votes to Reinstate Tariffs on Solar Panels from Southeast Asian Countries

The solar industry is one of this country’s most heavily subsidized and hand-held industries.

With promises of tax breaks, energy savings, and other supports, solar power has increased dramatically.

In 2010, solar and wind combined made up only 1.7% of global electricity generation. By last year, it had climbed to 8.7% — far higher than what had previously been predicted by mainstream energy models. For example, in 2012 the International Energy Agency expected that global solar energy generation would reach 550 terrawatt-hours in 2030, but that number was exceeded by 2018. These models often assume that the growth of solar and wind will be linear, but in reality the growth has been exponential.

However, price-based realities may soon darken expectations of exponential growth based on increased costs since Congress voted to reinstate tariffs on solar panels from several Southeast Asian Countries.

The Senate approved a measure Wednesday that would reinstate tariffs on solar panel imports from several Southeast Asian countries after President Joe Biden paused them in a bid to boost solar installations in the U.S.

Lawmakers also approved a separate plan to undo federal protections for the lesser prairie chicken, a rare grouse that’s found in parts of the Midwest and Southwest, including one of the country’s most prolific oil and gas fields.

The two measures are part of efforts by newly empowered Republicans to rebuke the Democratic president and block some of his administration’s initiatives, particularly on the environment. Republicans control the House and have strong sway in the closely divided Senate, where California Democratic Sen. Dianne Feinstein remains out for health reasons and conservatives such as Sen. Joe Manchin, D-W.Va., often side with the GOP.

Biden has pledged to veto the bill, and the veto could only be overturned with a two-thirds Senate majority.

The basis for the measure is that it is believed the counties are helping circumvent restrictions from panels made in China.

The tariff moratorium was imposed to keep solar panels coming into the country as the U.S. boosts capacity. Solar energy is a key step toward reaching the White House’s climate goals.

The president had issued the moratorium amid a Commerce Department probe into whether companies were circumventing tariffs on Chinese shipments of solar products to the U.S. Commerce was looking at a complaint alleging that eight solar companies manufacture solar cells and components in China, then send those cells and modules to Cambodia, Malaysia, Thailand and Vietnam for “minor processing” before exporting them to the U.S. The department preliminarily found that four of the eight companies were attempting to bypass U.S. duties by doing minor processing in one of the Southeast Asian nations.

Representatives of the solar industry are upset about the potential loss of the cheap supply.

If the two-year moratorium is lifted, U.S. solar developers could face a total of $1 billion in retroactive tariffs, according to the Solar Energy Industries Association [SEIA]. The legislation could also eliminate 30,000 jobs and $4.2 billion in domestic investment, the group estimated.

Abigail Ross Hopper, SEIA’s president and CEO, said in a statement that the U.S. can’t produce enough solar panels and cells to meet demand, and the remaining months of Biden’s moratorium provides the country time to close that gap.

“The United States can get there and become a global leader in clean energy manufacturing and development,” Hopper said. “Overturning the moratorium at this stage puts that future at risk.”

A review of the numbers shows why the solar industry is concerned.

China controls more than 80 percent of the world’s solar panel production, a figure that hasn’t waned as Biden spends hundreds of billions of dollars on green energy subsidies intended to give the United States the ability to “compete with China.” Instead, U.S. solar companies have been flooded with increased demand and have turned to China to satisfy it.

A reimposition of Chinese solar tariffs would cost U.S. developers at least $1 billion in retroactive fees, prompting solar executives and trade groups to publicly stress their need to maintain a free flow of cheap Chinese goods.

Legal Insurrection readers may recall that Biden’s Inflation Reduction Act offered billions of dollars in tax incentives for facilities using American equipment to accelerate the decarbonization of the U.S. power sector while creating domestic jobs.

Like everything else associated with Biden, that move is full of fail.

Array Technologies Inc (ARRY.O) of Albuquerque, New Mexico, which makes solar trackers, said its business has not yet experienced an expected IRA-related boom.

“The main feedback we get is that there needs to be clarification from the Department of Treasury on what qualifies as domestic content under the IRA,” CEO Kevin Hostetler said on a call with investors last month.

A Treasury Department spokesperson said the agency was “focused on providing clarity and certainty for taxpayers and ensuring the bonus as written in the statute is workable for taxpayers.”

..In February, top U.S. solar manufacturer First Solar Inc (FSLR.O) said it would delay further expansion decisions until Treasury releases its guidelines.

Reality can’t be legislated…it can only be experienced.

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