The solar energy industry is in a frenzy, and projects are coming to a halt, after the Biden administration launched an investigation that some solar CEOs fear will devastate the industry.
The Commerce Department launched an investigation in March to determine whether four Southeast Asian countries that supply roughly 80% of US solar panels and parts — Cambodia, Malaysia, Thailand, and Vietnam — are using Chinese components that should be subject to US tariffs.
The repercussions on the industry have been significant.
According to a survey conducted in late April by the Solar Energy Industries Association, a non-profit trade association, 318 solar projects in the United States have already been delayed or canceled, and several CEOs have told CNN that more will follow. Industry leaders are concerned that the investigation will have a negative impact on the solar workforce.
The Commerce Department has defended it as a transparent and necessary process, but several solar industry experts and executives told CNN that the threat of steep, retroactive tariffs has effectively frozen most solar imports into the US.
According to a person familiar with the conversations, solar industry leaders have been in contact with the Commerce Department and have expressed their concerns about the investigation to Biden’s top climate officials, including McCarthy and US Climate Envoy John Kerry.
The Commerce investigation follows a ban on solar panels and parts suspected of being linked to forced labor in China’s Xinjiang Province last year.
After the government claimed that the Chinese company Hoshine Silicon Industry Co. uses forced Uyghur labor, the Department of Homeland Security directed US Customs and Border Protection to issue a Withhold Release Order, which banned imports made by the company.
CBP agents seized and detained any solar products they suspected had links to Hoshine at ports across the country, unless companies could prove otherwise.
According to US Customs and Border Protection statistics provided to CNN, the agency detained 734 shipments worth $246 million, which the agency claims is only 1.86 percent of the total value of all solar imports into the US. However, Hershman claims that the order had a chilling effect on the industry, with companies withholding shipments for fear of being caught in an overly broad net at US ports.
This year was supposed to be a banner year for solar growth in the United States. According to Rystad, an independent energy research firm, the United States will add another 27 gigatons of solar energy this year.
With the Commerce Department investigation, border seizures, high solar component costs, and no new legislation in Congress to grease the wheels for more renewable energy, Rystad estimates the US will only add around 10 gigatons in 2022.
Ortega claimed that the reversal jeopardizes Biden’s own climate goal of cutting greenhouse-gas emissions in half by 2030. According to Ortega’s analysis, the United States would need to install around 50 gigatons of solar photovoltaic capacity per year from 2022 to 2030 to keep Biden’s goal on track.
Secretary of Commerce Gina Raimondo told lawmakers at a recent hearing on Capitol Hill that strict trade laws required her department to initiate and complete an investigation. According to a Commerce Department official, the department expects to issue a preliminary finding on the investigation by late August, but a final determination could take as long as January 2023.
Nonetheless, Raimondo has been called into question and chastised by politicians from both parties. This week, a bipartisan group of 19 senators wrote to Biden, requesting an expedited preliminary decision on the investigation. During a recent hearing, Nevada Democratic Sen. Jacky Rosen pressed Raimondo on her “very serious concerns” about the investigation.
California’s Democratic Gov. Gavin Newsom and Indiana’s Republican Gov. Eric Holcomb both recently wrote to Raimondo, expressing concern that the investigation could harm solar growth and jobs in their states.