President Waives Tariffs on Solar Panels From Southeast Asia

WASHINGTON — President Joe Biden waived tariffs on solar panels from four Southeast Asian nations on Monday and invoked the Defense Production Act to boost solar panel manufacturing in the United States.

The tariff exemption, which will last for two years, applies to panels from Cambodia, Malaysia, Thailand and Vietnam.

In a statement released by the White House, Biden said the United States has long relied on imported solar panels to support the sector’s growth, but that they’ve become harder and harder to come by.

“This acute shortage of solar modules and module components has abruptly put at risk near-term solar capacity additions that could otherwise have the potential to help ensure the sufficiency of electricity generation to meet customer demand,” Biden said. 

“Roughly half of the domestic deployment of solar modules that had been anticipated over the next year is currently in jeopardy as a result of insufficient supply. Across the country, solar projects are being postponed or canceled,” he said.

The president said the federal government is working with the private sector to promote domestic solar manufacturing, but building that capacity will take time. 

“Immediate action is needed to ensure in the interim that the United States has access to a sufficient supply of solar modules to assist in meeting our electricity generation needs,” the president said.

The moves come on the heels of a widely panned decision by the Commerce Department to step up the pace of its two-month-old investigation of solar technology imports.

The development of hundreds of large-scale solar farms are on hold across the United States as the industry and developers await the outcome of a federal investigation initiated in late March into potential trade violations involving solar panels brought from Asian suppliers.

In announcing its investigation, the Commerce Department said it is trying to determine whether Chinese manufacturers are skirting U.S. duties by assembling their panels in Cambodia, Malaysia, Thailand and Vietnam before sending them overseas.

Such a move would be a violation of anti-dumping rules.

In related news, the White House said the DPA would also be used to expand manufacturing of building insulation, heat pumps, transformers, and equipment for “clean electricity-generated fuels” such as electrolyzers and fuel cells.

By using his DPA authority, with the necessary funding appropriated by Congress, the White House said, President Biden is enabling the federal government to invest in companies that can build clean energy facilities, expand clean energy manufacturing, process clean energy components, and install clean energy technologies for consumers. 

When it comes to solar photovoltaic energy, supporting a secure, stable, diversified and competitive solar supply chain will “increase national security, promote energy independence, help to address the urgent threat of climate change, and drive down energy costs for American consumers.”

The White House went on to say that by expanding the domestic production of transformers and critical grid components, the United States would immediately enhance its domestic energy security, decrease vulnerability of U.S. infrastructure, and ultimately support climate security and stability worldwide.  

Finally, the president said by leaning on the DPA and bolstering the domestic production of heat pumps, insulation electrolyzers and fuel cells, the United States will limit “the U.S. reliance” on adversaries such as Russia for oil and gas, and building retrofits can reduce energy use by 50% or more.

Commerce Secretary Gina Raimondo said on Monday that “diversifying our energy sources and responding to the climate crisis have never been more urgent, and solar energy is an essential component of meeting those needs.”

“As we invest in expanding domestic solar manufacturing and strengthening supply chains to protect our long-term energy security, imported solar panels remain an important component to addressing the immediate demands of bringing additional energy sources online and addressing the energy needs of the American people,” she said.

“I remain committed to upholding our trade laws and ensuring American workers have a chance to compete on a level playing field,” Raimondo said. “The president’s emergency declaration ensures America’s families have access to reliable and clean electricity while also ensuring we have the ability to hold our trading partners accountable to their commitments.”

Heather Zichal, CEO of the American Clean Power Association, applauded the moves by Biden, predicting they would “rejuvenate the construction and domestic manufacturing of solar power by restoring predictability and business certainty.”

“Biden’s proclamation today to use the full power of executive authority to jumpstart the domestic solar industry is a bold act of leadership,” Zichal continued. “It recognizes the immediate need to protect middle-class American jobs, promote U.S. energy independence, protect consumers from rising electricity bills in the face of inflation, and stay true to his climate commitments.”  

For Energy Secretary Jennifer Granholm, the calculus behind Monday’s decisions regarding clean energy was simple. 

“For too long the nation’s clean energy supply chain has been over-reliant on foreign sources and adversarial nations,” Granholm said. “With the new DPA authority, DOE can help strengthen domestic solar, heat pump and grid manufacturing industries while fortifying America’s economic security and creating good-paying jobs, and lowering utility costs along the way.”

Dan can be reached at [email protected] and @DanMcCue