Commerce Department puts solar industry on ice

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The UN Secretary-General recently warned that the world is “slumbering towards a climate catastrophe”. It is therefore a tragic irony that the most immediate and sweeping threat to President Joe Biden’s clean energy and climate agenda does not come from the recent push for increased fossil fuel development. or the intransigence of climate deniers, but a little-noticed but devastating move at the Biden administration’s Commerce Department that brings America’s booming solar growth to a screeching halt.

On March 28, the Department of Commerce launched a “circumvention investigation” that opened the door to the imposition of retroactive duties (effective to the date the investigation was announced) of up to 250% on imports of key components for solar energy from four Southeast Asian countries. nations (Cambodia, Malaysia, Thailand and Vietnam). It’s not nothing. These countries supplied about 84% of all US solar panel imports last year and half of the solar cells that US solar panel makers routinely rely on.

Due to the immense cost uncertainty triggered by this decision, we are already seeing a dramatic and immediate decline in investment and development of solar energy in the United States. After all, how do companies approach financial decisions about investing in new solar projects when costs are unknown and could more than double without notice?

The decision also has an immediate impact on the availability of new solar modules in the United States, with global suppliers predictably choosing to ship their solar products to other countries where there is not the same risk of punitive tariffs. . In a recent survey of more than 400 companies, the Solar Energy Industries Association found that 78% of companies that purchase or use photovoltaic modules were notified that scheduled shipments were canceled or delayed. More than 80% of domestic manufacturers, the group whose Commerce Department action was supposed to benefit, expect severe or devastating effects when they lose access to key solar components. Two-thirds of companies responding to the survey say 70% or more of their workforce is now at risk.

Officially, the Commerce Department is just “investigating,” but the announcement in the Federal Register has peremptorily made the financial decisions essential to the development of solar energy perilous, if not impossible, for the months to come. The result impedes an important engine of economic growth and job creation in the United States and a crucial part of any effective effort to combat climate change. Not to mention that the U.S. trade repercussions of an adverse Commerce Department ruling would extend far beyond Southeast Asia, affecting the entire renewable energy industry and undermining both our economic and the climate imperative.

Such unfortunate outcomes could be avoided if the White House and Commerce Department more carefully consider the implications of this course of action and work to reassure the domestic renewable energy market by unequivocally eliminating the potential application of new retroactive tariffs. in this case and others. I like this. Concerns about Southeast Asian suppliers are being constructively addressed not by crippling the U.S. solar sector, but by enacting policies that strengthen our domestic supply chain, such as the energy tax proposal own under negotiation that offers tax credits for advanced manufacturing and long-term tax incentives. for solar energy.

Without such swift action to reassure the clean energy market, renewable energy deployment in the United States in 2022 is likely to fall precipitously not only from 2021 levels, but also from levels reached over the past few years. previous four years. A setback of this magnitude will put the Biden administration’s clean energy goals out of reach, undermine one of the nation’s fastest-growing sources of new jobs, and make it nearly impossible to achieve the emissions reductions that scientists deem necessary to avoid the worst impacts. of climate change.

Gregory Wetstone is the President and CEO of the American Council on Renewable Energy, a national nonprofit organization that brings together finance, politics, and technology to accelerate the transition to a renewable energy economy.

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