A presidential proclamation released by the White House this weekend would increase tariffs on imported solar cells and modules in the final currently planned year of the tariffs and eliminate an exemption for two-sided solar panels, which the administration argued has “impaired the effectiveness” of the tariffs.
Trump also directed the U.S. Trade Representative to assess whether the duties, established in 2018 under Section 201 of the 1974 Trade Act, should be extended. The tariffs are currently set to expire in 2022.
The American solar industry has thus far managed to live with the challenges brought by the solar tariffs. Though the tariffs, which began at 30 percent in 2018, made some imported panels more expensive, large-scale solar installations have continued to climb since they were established. Several manufacturers also set up shop in the U.S., encouraged by the potential to sell products to developers tariff-free.
But increasing the tariffs from 15 to 18 percent in 2021 and extending their duration could pose difficulties for domestic solar installers as the coronavirus pandemic restrains the industry’s overall growth.
Eliminating the exemption for bifacial solar panels — which the Trump administration has repeatedly tried to do — may have more significant ramifications. Developers have increasingly come to rely on bifacial modules due to their higher efficiency and only marginally higher costs.
The Trump administration previously tried to revoke its bifacial exclusion through the U.S. Trade Representative but was rebuffed by the United States Court of International Trade after challenges were lodged by several solar players, including Invenergy and the Solar Energy Industries Association. Under the presidential proclamation, the exclusion would disappear 15 days from the order’s publication on Oct. 10, though the move is still open to legal challenge.
SEIA told Greentech Media it will “consider every option” to reverse the administration’s decision. Invenergy did not respond to request for comment about whether it was likely to challenge this most recent executive action.
The proclamation comes just weeks ahead of the 2020 election, but Trump’s move may have a lasting impact even if his reelection bid is unsuccessful. Democratic candidate Joe Biden has tied clean energy to economic recovery amid the pandemic and set a target for the United States to reach 100 percent clean electricity by 2035, a goal that would rely significantly on a large-scale build-out of solar.
Depending on the terms of a possible tariff extension from the U.S. Trade Representative, however, Biden may have limited authority to pull back solar tariffs (it’s also not certain that a Democratic presidential administration would oppose solar tariffs).
SEIA, the industry’s largest trade group, continues to oppose the duties. Doubling down on tariffs in the current economic environment “counters critical needs of our country,” said Abigail Ross Hopper, the group’s president and CEO, in a statement emailed to GTM.
“Aspects of this policy may also run counter to law. Since the administration imposed solar tariffs, we have fought to delay the termination of the bifacial solar panel exemption. And we have suggested many more constructive ways to expand American manufacturing, including targeted tax policy and suggestions for growing the whole solar supply chain in a way that would meaningfully create jobs and fuel the economy,” said Hopper.
Despite SEIA’s stance, tariffs have divided the solar industry. While the approach is favored by companies that have U.S. manufacturing bases, such as Hanwha Q Cells, solar developers largely oppose them.
Increasing and extending tariffs would provide a boost to domestic manufacturers, said Xiaojing Sun, a senior solar analyst at Wood Mackenzie, because it will cause prices to increase for products shipped from Chinese-based companies producing bifacial solar, such as Trina and Longi.
In the proclamation, Trump claimed the changes will help “achieve the full remedial effect envisaged” when the tariffs were put in place. A midterm review of the duties completed in February showed that while tariffs had spurred 3 gigawatts of domestic module manufacturing, the U.S. has been left without crystalline silicon photovoltaic cell production.
