President Joe Biden issued an emergency order Monday to increase solar panel manufacturing in the United States and declared a two-year tariff exemption on panels from Southeast Asia in an effort to jumpstart an industry critical to his climate change-fighting goals.
His use of the Defense Production Act and other executive actions comes as industry groups complain that the solar industry is being slowed by supply chain issues caused by an ongoing Commerce Department investigation into possible trade violations involving Chinese products.
The Commerce Department announced in March that it was investigating solar panel imports from Thailand, Vietnam, Malaysia, and Cambodia, concerned that products from those countries were circumventing US anti-dumping rules that limit imports from China.
Solar energy companies gained ground in early trading on Wall Street on Monday.
Biden’s actions, according to White House officials, aim to increase domestic production of solar panel parts, building installation materials, high-efficiency heat pumps, and other components such as cells used in clean-energy generated fuels. They described the tariff suspension, which affects imports from Thailand, Vietnam, Malaysia, and Cambodia, as a stopgap measure while other efforts increase domestic solar power production — despite the administration’s continued support for US trade laws and the Commerce Department investigation.
The Commerce Department has defended its probe. In May, Secretary Gina Raimondo told a Senate panel that the solar inquiry is following a legal process that does not allow for consideration of climate change, supply chains, or other factors.
Nonetheless, clean energy leaders have been warning since then that the investigation, which could result in retroactive tariffs of up to 240 percent, would severely impede the US solar industry, resulting in thousands of layoffs and jeopardizing up to 80% of planned solar projects across the country. This could jeopardize one of Biden’s top clean energy goals and contradict his Democratic administration’s push for renewable energy like wind and solar.
“The president’s announcement will revitalize solar power construction and domestic manufacturing by restoring the predictability and business certainty that the Department of Commerce’s flawed inquiry has disrupted,” said Heather Zichal, CEO of the American Clean Power Association and a former Obama administration official, in a statement Monday.
Others made similar sounds. The Solar Energy Industries Association’s president and CEO, Abigail Ross Hopper, praised Biden’s “thoughtful approach to addressing the current crisis of the paralyzed solar supply chain.”
“Today’s actions will lead to increased employment in the solar industry and foster a robust solar manufacturing base here at home,” said Ross Hopper in a statement.
However, major solar panel manufacturer First Solar Inc. slammed the moves, claiming that freezing tariffs gives “unfettered access to China’s state-subsidized solar companies for the next two years” and that using the Defense Production Act is “an ineffective use of taxpayer dollars that falls far short of a durable solar industrial policy.”
“The administration cannot stick a Band-Aid on the issue and hope that it goes away,” Samantha Sloan, the company’s vice president of policy, said in a statement.
The use of executive actions comes as the Biden administration’s clean energy tax cuts, as well as other major proposals aimed at encouraging domestic green energy production, have been stalled in Congress.
The Defense Production Act, which allows the federal government to direct manufacturing production for national defense, has become a tool that presidents have used more frequently in recent months. During the early stages of the coronavirus pandemic, President Donald Trump’s administration used it to manufacture medical equipment and supplies. Last month, Biden used its authority to prioritize increasing the nation’s supplies of baby formula in the face of a domestic shortage caused by the safety-related closure of the country’s largest formula factory.
According to Jean Su, director of the Center for Biological Diversity’s energy justice program, Biden’s announcement can “give critical momentum to the necessary transition to solar energy.”
“We hope that the president will use all of his executive powers to confront the climate emergency,” Su said.