President Biden’s administration has significantly bolstered American solar manufacturing and deployment through initiatives like the Inflation Reduction Act, resulting in a surge in solar installations and domestic manufacturing capacity. To counter China’s unfair trade practices, the administration is implementing measures such as increasing tariffs on imports, removing exclusions on certain solar panels, and closely monitoring import surges to protect American workers and businesses in the solar industry.
President Biden’s Investing in America agenda has catalyzed an American clean energy manufacturing and deployment boom. Through the President’s Inflation Reduction Act, incentives for manufacturing and deployment of clean energy, including incentives for domestically-manufactured solar products, have driven a historic surge in solar installations and announcements of new U.S. solar module and component manufacturing. The silicon solar cell was invented and demonstrated in the U.S. at Bell Labs in 1956, and the U.S. led the world in solar innovation and manufacturing for decades. China’s anticompetitive subsidization and trade practices, however, decimated the U.S. solar manufacturing industry in the 2000s and 2010s. Recently, as solar manufacturing has made a comeback in the U.S. thanks to President Biden’s leadership, China has further ramped up solar overcapacity, dumping artificially cheap modules and components onto the global market and circumventing trade enforcement measures in an attempt to put other countries’ manufacturers out of business.
Since President Biden took office, companies have announced more than $17 billion and 335 gigawatts of manufacturing investment throughout the solar supply chain, with enough announced investment in solar modules to power 18 million homes. Announced solar module manufacturing capacity has grown to more than 125 gigawatts, compared to 7 gigawatts of manufacturing capacity before passage of the Inflation Reduction Act. American manufacturing is powering a boom in solar deployment, which has doubled since President Biden took office and reached record highs last year, with 32.4 gigawatts of solar capacity installed in 2023, a more than 50 percent increase over 2022 installations.
President Biden believes that American workers and manufacturers can compete with anyone—as long as the competition is fair. Earlier this week, the Biden-Harris Administration directed the U.S. Trade Representative Katherine Tai to increase tariffs under Section 301 of the Trade Act of 1974 on $18 billion of imports from China to protect American workers and businesses – including by doubling the tariff rate on solar cells and modules from 25% to 50%.
Today, the Biden-Harris Administration is announcing new actions to strengthen American solar manufacturing and protect businesses and workers from China’s unfair trade actions:
- Removal of the bifacial module exclusion under Section 201. Bifacial solar panels generally used in utility-scale solar projects are not currently subject to safeguard tariffs under Section 201 of the Trade Act of 1974. Since this exclusion was implemented by the previous Administration, imports of bifacial panels have surged, now making up nearly all U.S. solar panel imports and undercutting the effectiveness of the Section 201 safeguard. Today, the Biden-Harris Administration is announcing that it plans to imminently remove this exclusion, which will offer U.S. solar manufacturers increased Section 201 tariff protection from unfair imports. Importers with pre-existing contracts for bifacial solar modules to be delivered within 90 days of the removal of the exclusion will be able to certify those contracts to continue using the exclusion for that period.
- Ending the solar bridge and cracking down on stockpiling. In June 2022, President Biden initiated a temporary, 24-month bridge to facilitate certain imports from Cambodia, Malaysia, Thailand and Vietnam duty-free to ensure robust deployment while the domestic solar manufacturing base ramped up. Since then, U.S. solar manufacturing and deployment have both grown dramatically. As the President has previously committed, the bridge will end as scheduled on June 6, 2024, and producers in Southeast Asia that have been found to be circumventing antidumping and countervailing duties on solar manufacturers from the People’s Republic of China (PRC) will be subject to those duties. Additionally, in implementing the solar bridge, the Department of Commerce requires that panels imported duty-free must be installed within 180 days to prevent stockpiling. Customs and Border Protection (CBP) has announced that it will vigorously enforce this provision, including by requiring importers to provide to CBP a certification of solar module utilization with detailed information about the modules being deployed.
- Monitoring import surges and oversupply. Imports of solar modules from Southeast Asia, where PRC manufacturers have been found to be circumventing antidumping and countervailing duties, have surged over the last year. PRC companies have recently built new capacity in these countries, targeting the U.S. market. The Department of Energy and the Department of Commerce will closely monitor import patterns to ensure the U.S. market does not become oversaturated and will explore all available measures to take action against unfair practices.
- Providing additional guidance on the domestic content bonus. The Inflation Reduction Act contains a bonus tax credit available to developers of clean energy projects that meet certain statutory requirements for sourcing iron and steel products and manufactured products from domestic producers. Today, the Department of Treasury is issuing further guidance concerning the domestic content bonus to enable more clean energy developers and manufacturers in the U.S. to take advantage of the bonus. While the domestic content bonus is already driving partnerships between developers and manufacturers in the U.S., stakeholders have raised concerns about challenges in determining eligibility. Today’s Notice creates a new elective safe harbor that gives clean energy developers the option of relying on Department of Energy-provided default cost percentages to determine bonus eligibility. Treasury and IRS continue to consider stakeholder comments and plan to issue further domestic content guidance to address issues not in the scope of this guidance, including adding further sectors, including offshore wind, to the new elective safe harbor table and issuing proposed rules for projects using elective pay (sometimes referred to as direct pay). In particular, Treasury and IRS, with DOE and other agencies, continue to evaluate potential options to further the IRA’s goal of incentivizing U.S. solar manufacturing, including solar wafer production.
- Supporting technology development to onshore solar wafer and cell manufacturing. The Department of Energy is announcing more than $70 million in research and development selections to seed new technologies across the solar supply chain. Funding from the President’s Bipartisan Infrastructure Law will enable new entrants to the solar manufacturing market to establish their technologies and access more capital. The 18 selected projects will address gaps in the domestic solar manufacturing supply chain, including equipment, ingots and wafers, and silicon and thin-film solar cell manufacturing, and open new markets for solar technologies like integrated-photovoltaics and agrivoltaics.
- Managing the tariff-rate quota for solar cells under Section 201 to support expanded solar manufacturing. Currently, there is a 5-gigawatt tariff-rate quota for imported solar cells under Section 201. The Administration will closely monitor the level of imported solar cells used to manufacture panels in the U.S. and will work to raise the quota by 7.5-gigawatts if imports approach the current quota level, to ensure domestic module manufacturing continues to grow while manufacturers scale production throughout the supply chain.
These actions follow a series of Biden-Harris Administration initiatives to support solar manufacturing and deployment.
- $7 billion in selections for Solar for All grants. In April, the Environmental Protection Agency announced grantees for its Solar for All competition under the Greenhouse Gas Reduction Fund, created by President Biden’s Inflation Reduction Act. Solar for All grantees will serve all 50 states and the U.S. territories, as well as Tribal nations, to expand cost-cutting residential solar solutions to at least 900,000 low-income households and save families an average of $400 per year on their utility bills.
- Expanded eligibility for Energy Communities bonus credit. In March, the Department of Treasury and the IRS issued additional guidance for the bonus credit, created by the Inflation Reduction Act, for clean energy generation projects placed in service in communities that have historically been reliant on fossil fuel jobs. The additional guidance extends bonus eligibility to areas of the country where there are approximately 100 more planned utility-scale solar projects, helping to drive greater future clean energy investment into energy communities.
- Support for solar component manufacturing. In April, the Department of Energy released information provided by recipients of 48C Advanced Energy Projects credits who voluntarily consented to have their project details shared publicly. Out of $4 billion in allocations, projects representing approximately $1.9 billion in allocations volunteered to have information shared, including Highland Materials, Inc., which received $255.6 million to produce solar-grade polysilicon in Tennessee’s coal country and SOLARCYCLE, Inc., which received $64 million to produce solar glass in Georgia. The second round of $6 billion in 48C funding is currently open for applications.
Developing solar energy on America’s public lands. In April, the Department of the Interior finalized regulations that will ensure America’s public lands play a vital role in the clean energy economy by lowering the cost of developing solar and wind projects and improving permitting application processes for renewable energy projects. The Department also announced that more than 10 gigawatts of clean energy are currently being generated on public lands with the completion of two new solar projects, and that the Administration has surpassed its target to permit at least 25 gigawatts of clean energy by 2025 – enough clean energy to power more than 12 million homes across the country.
May 16 2024 Washington, DC
Sources: Midtown Tribune news – WH.gov