U.S. Solar Manufacturers Demand Review of China-Tied Imports

ight now, the U.S. solar industry is at a crossroads, dealing with big challenges and big opportunities as it wrestles with trade tensions, unpredictable markets, and government efforts to boost homegrown manufacturing. The recent move to bring back tariffs on bifacial solar panels, making up nearly 98% of America's solar imports, is a key development in the U.S. solar market's battle against foreign producers of the cheapest solar panels. Stick with SunValue Solar as we unpack the details of this ongoing tug-of-war over tariffs and trade tactics.

A Storm Brewing: Tariff Exemptions on the Chopping Block

The U.S. has a history of putting tariffs on foreign-made photovoltaic (PV) modules. Back in 2012, under the Obama administration, these tariffs were set on cheap solar panels from China to counteract dumping and unfair subsidies, known formally as anti-dumping and countervailing duty (AD/CVD) laws. They were increased by President Trump in 2018 and extended by President Biden four years later. However, in a move that strayed from Trump's policy, Biden decided not to include bifacial solar panels in these tariffs.  

In mid-April, news broke out when Reuters, citing sources close to the White House, reported that the Biden administration is likely to approve a request from Hanwha Qcells. The company, which is a branch of the South Korean powerhouse Hanwha Corp, has called for an end to the two-year trade exemption for bifacial modules from China and several other countries. The goal was to shield Hanwha’s massive $2.5 billion investment in the U.S. from lower-priced Asian competitors.

A week later, it was confirmed that seven companies—Korea's Hanwha Qcells, Switzerland's Meyer Burger, Norway's REC Silicon, and American companies First Solar Inc, Convalt Energy, Mission Solar, and Swift Solar—made a plea to President Biden's administration. They asked for tariffs on panels and cells from four Asian countries to protect their hefty investments in manufacturing within the U.S.

Joining forces as the American Alliance for Solar Manufacturing Trade Committee, these industry leaders have urged the government to rethink tariff exemptions on solar imports from Vietnam, Cambodia, Thailand, and Malaysia. They argue that these countries are being used as proxies by Chinese manufacturers to dodge U.S. tariffs by moving their production lines there.

The group pointed out, “China’s unfair and illegal trade tactics have flooded the market with low-cost dumped solar panels, making it tough for U.S. companies to keep up.” They noted that solar module prices have hit an all-time low, dropping more than 50% in just the past year.

Moreover, the coalition claimed that if U.S. developers sourced 55% of their products locally, we could see the solar manufacturing industry boosting up to 900,000 jobs across the country by 2035. Not to mention, bringing more of the solar supply chain back to the U.S. could slash worldwide solar manufacturing emissions by 30%.

Why Bifacial Solar Modules Are at the Center of Tariff Talks

At the heart of this conflict are bifacial solar modules. Unlike monofacial panels, which are commonly found on rooftops and only absorb sunlight from one side, bifacial alternatives can harness solar energy from both sides. Here’s how they work: the front of the panel catches direct sunlight, while the back captures light reflected from the ground or surrounding areas.

Thanks to their clever design, bifacial panels generate more renewable energy than their monofacial counterparts. Research shows that bifacial solar modules mounted on rooftops can increase energy output by as much as 22.6%. These high efficiency PV panels are perfect for big energy needs like large-scale solar farms, but also serve well as some of the most efficient home solar panels for personal use. That being said, for optimal energy production, bifacial panels should be placed above surfaces that reflect a lot of light, like stony, sandy, or snowy ground.

Even though bifacial technology boasts some of the most efficient solar panels available, several hurdles could slow its market growth. First of all, the big upfront cost needed for large-scale projects can be a major turn-off for potential adopters. There's also a hefty price tag on the necessary infrastructure updates like grid modifications and storage solutions.

Additionally, fluctuating government policies, competition from traditional energy sources and supply chain hiccups, are all making it tougher for bifacial solar panels to catch on. If these challenges aren't overcome, this technology risks falling short of its true potential in the energy sector.

How Government and Industry React

Soon after details of Qcells' request began to surface, President Biden has signaled a firm approach to trade, underlining the importance of "fair competition" instead of conflict. This approach is part of a wider push to protect emerging industries like solar panel manufacturing from international competitors, with a keen eye on China. The government has already set up several tactics, including federal funding and benefits under acts like the Inflation Reduction Act, to boost American manufacturing and secure the supply chain for vital technologies.

Despite these efforts, there's a clear divide within the solar sector. While some push for hefty tariffs and trade barriers to support local jobs and industries, others warn that such actions might slow innovation and lead to higher solar panel prices over time. Critics from top renewable energy organizations like the Solar Energy Industries Association (SEIA) and the American Clean Power Association (ACP) argue in their statement that instead of imposing penalties, adopting policies like the Advanced Manufacturing Tax Credit would be a more effective way to support U.S. manufacturers while keeping the market steady.

Moreover, companies such as Array Technologies claim that raising duties would only hold back the growth of the U.S. solar industry, creating uncertainty and putting vital clean energy projects on hold.

What Happens Next?

The U.S. Department of Commerce has a 20-day window to decide whether to start an investigation based on the petition they received. If they move forward, the International Trade Commission will then have 45 days to come up with a preliminary report on whether the industry has been seriously affected. However, a final call won't be made until spring 2025.

By deciding to investigate these imports, the Commerce Department is setting the stage for the future of solar manufacturing in America. A preliminary report showing serious harm could lead to heavy duties, between 50% and 250%, drastically changing the price tag on solar projects in the U.S.

Wrapping Up: Big Moves Ahead for U.S. Solar

The stage is set and the spotlight is on the U.S. Department of Commerce and the International Trade Commission, as they're about to make some pivotal decisions that could transform the American solar industry. With the chance of tariffs coming back and a final call not due until spring 2025, there's a lot of uncertainty and change in the air.

The growth of the U.S. solar market is driven by a blend of market conditions, international trade agreements, and government initiatives. Today's decisions will profoundly influence our energy future, from manufacturing jobs to achieving energy independence and sustainability. Moving forward, we need a balanced plan that considers everyone involved, helping the U.S. protect its economy and push forward with clean energy goals.

Sources:

https://americansolartradecmte.org/