July 4, 2022
Biden moves to ease trade turmoil threatening his solar energy ambitions – POLITICO

Biden moves to ease trade turmoil threatening his solar energy ambitions – POLITICO

The White House announced Monday that Biden will facilitate a 24-month “bridge” for certain solar imports, allowing developers to source solar modules and cells from the four countries — Cambodia, Malaysia, Thailand and Vietnam — which together account for about 80 percent of panel imports into the U.S.

Biden will also authorize the Energy Department to use the DPA to rapidly expand American manufacturing of solar panel parts, such as the photovoltaic modules that turn sunlight into electricity, as well as building insulation, heat pumps, equipment for making and using clean electricity-generated fuels, and power grid infrastructure like transformers.

“Together these actions are going to spur domestic manufacturing,” a senior administration official said on a call with reporters Monday. “It’s going to put wind in the sail of construction projects all around the country that are employing folks who are making a good wage.”

Just the initiation of the probe in late March and the threat of potential retroactive tariffs has caused widespread project cancellations and delays. The White House has faced pressure from both Democrats and Republicans to take action to stem the fallout from the probe, which Commerce officials have described as a process that leaves little room for Biden or Commerce Secretary Gina Raimondo to directly weigh in.

The administration said Monday the actions will not interfere with the ongoing Commerce investigation. “This administration has been steadfast in making sure that the processes around the implementation enforcement of our trade laws are carried out consistent with those laws with integrity, appreciating the quasi-judicial nature of the specific investigation,” the administration official said.

But the new actions have already drawn criticism from the small, California-based solar manufacturer that lodged the initial complaint that imports were circumventing existing duties.

“President Biden is significantly interfering in Commerce’s quasi-judicial process,” said Auxin Solar CEO Mamun Rashid. “By taking this unprecedented — and potentially illegal — action, he has opened the door wide for Chinese-funded special interests to defeat the fair application of U.S. trade law.”

The administration official countered that the president is utilizing emergency authority under existing trade laws while the investigation continues and that the action was developed in consultation with a broad inter-agency legal team, including the Justice Department.

Faced with an onslaught of public pressure on the issue, the White House met last month with several Democratic senators who oppose the Commerce Department inquiry, and officials promised action soon to ease the uncertainty for the solar industry.

Biden’s announcements Monday are a “much-needed reprieve from this industry-crushing probe,” said Abigail Ross Hopper, president and chief executive officer of the Solar Energy Industries Association, which has opposed the probe.

“The president is providing improved business certainty today while harnessing the power of the Defense Production Act for tomorrow,” she said in a statement. “Today’s actions protect existing solar jobs, will lead to increased employment in the solar industry and foster a robust solar manufacturing base here at home.”

Roselund underscored that the actions Monday will have significant market impacts, with prices for solar equipment expected to come down almost immediately and shipments to resume.

“This could save a lot of solar projects that were in danger of being canceled and could [speed] up the timelines of others that were being delayed,” he said. “So this could result in substantially more solar being installed this year and next year.”

In addition, the White House announced the development of master supply agreements for domestically manufactured solar systems to increase the speed and efficiency with which domestic clean electricity providers can sell their products to the U.S. government and so-called super preference status to apply domestic content standards for federal procurement of solar systems.

Opponents of the trade probe — including governors from several states, more than 80 House Democrats and more than 20 senators — have called on Commerce to quickly issue a preliminary determination in the inquiry ahead of the late August deadline. The final determination in the proceeding could ultimately stretch well into next year and could result in retroactive tariffs, the potential for which has sparked cancellations of projects and job losses in the U.S.

Nevada Sen. Jacky Rosen, who led the Senate letter opposing the probe, applauded the White House’s “concrete action” on the issue Monday.

“The risk of additional tariffs on imported solar panels would have been devastating for American solar projects, the hundreds of thousands of jobs they support, and our nation’s clean energy and climate goals,” Rosen said in a statement. “The Administration’s announcement is a positive step that will save American solar jobs and invest in our own long-term domestic solar manufacturing capabilities.”

The trade probe is being conducted by career staff, and Raimondo has maintained in the face of pressure that her hands are tied on the inquiry. Instead, she has said that the department will move forward as quickly as the statute allows.

Proponents of the probe meanwhile have warned against any political influence that could undercut the trade enforcement proceedings.

Six Democrats late last month pressed the administration to proceed with the Commerce investigation, and they complained the “troubling” lobbying against the probe reached “mass hysteria.” The United Steelworkers have also expressed concern that solar proponents were distorting how the investigation process works.

On Monday, Nick Iacovella, a senior vice president at the pro-manufacturing group Coalition for a Prosperous America, said that the White House did not consult with U.S. solar manufacturers ahead of the announcements.

“You can’t say that you want to spur domestic production, and then allow the Chinese to continue to dump product, which is a direct threat and something that is working against increasing domestic production,” he added.

The White House has framed the announcements Monday as bid to boost solar manufacturing in the U.S. at a time when efforts on the Hill to pass tax credits, including incentives targeting U.S. solar manufacturing, remain stalled. Democrats are expected to restart efforts to pass a party-line measure that would offer hundreds of billion of dollars to the clean energy credits and incentives.

“Now that we have a reprieve from the destructive impacts of the Commerce inquiry, we look forward to working with the administration and our allies in Congress to secure the enactment of policies that strengthen our domestic supply chain, such as the clean energy tax package currently being negotiated that provides advanced manufacturing tax credits and long-term tax incentives for renewable power,” said Gregory Wetstone, the president and CEO of the American Council on Renewable Energy.

First Solar, a U.S. manufacturer of solar panels, reiterated in its own statement that the White House did not consult U.S. solar manufacturers and said the action would benefit China’s state-subsidized solar industry.

“Such a proclamation directly undermines American solar manufacturing by giving unfettered access to China’s state-subsidized solar companies for the next two years. It sends the message that companies can circumvent American laws and that the U.S. government will let them get away with it as long as they’re backed by deep-pocketed political pressure campaigns run by lobbyists,” First Solar’s Vice President of Global Policy Samantha Sloan said.

Sloan added that use of the DPA “is an ineffective use of taxpayer dollars and falls well short of a durable solar industrial policy,” such as the solar tax credits which the administration has so far failed to deliver.

Monday’s actions are not the first time the president has attempted to resolve tensions between his clean energy and domestic manufacturing goals. The administration has previously considered banning imports of polysilicon, a critical solar panel material, from China’s Xinjiang region based on allegations of forced labor, and whether to extend Trump-era tariffs on Chinese shipments by four years.

Source: https://www.politico.com/news/2022/06/06/biden-solar-power-equipment-imports-00037359

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