Solar manufacturers are asking the U.S. government to place duties on $12.5 billion of imported equipment from Southeast Asia, setting the stage for a sweeping trade investigation that threatens to make power projects more expensive.
In petitions filed Wednesday, seven panel makers and polysilicon producers sought trade help to counteract what they say are unfair practices by overseas rivals. Their requests raise the prospect of tariffs as high as 271.5% later this year.
While another batch of tariffs could bolster U.S. solar manufacturing -- a priority for President Joe Biden -- the move would risk imperiling another of his goals: accelerating panel installations on farms and rooftops to help combat climate change.
Shares of First Solar Inc., America's biggest solar manufacturer, rose as much as 1.3% in trading Wednesday.
Biden's Inflation Reduction Act delivered tens of billions of dollars in subsidies for new solar factories. But the country still depends on imports from Asia for most of its panel supply -- and domestic manufacturers argue the U.S. government support has been undermined by other federal policies as well as a surge of cheap imports.
Those imports -- worth $12.5 billion over the past 12 months -- threaten "the existence of the emerging domestic solar manufacturing industry and the billions of dollars of U.S. investments" in it, said Tim Brightbill, co-chairman of Wiley Rein LLP's international trade practice and lead counsel for the petitioners. "All of the recent investment in U.S. solar manufacturing -- including billions of dollars worth from the Inflation Reduction Act -- is now at risk."
The complaints from manufacturers Convalt Energy Inc., First Solar Inc., Hanwha Qcells USA Inc., Meyer Burger (Americas) Ltd., Mission Solar Energy LLC, REC Silicon ASA and Swift Solar Inc. focus on solar cells from Cambodia, Malaysia, Thailand and Vietnam. Those countries constitute about 80% of U.S. panel imports.
The U.S. solar makers want a government investigation -- and duties ranging from 70.4% to 271.5% on the imports. They allege the equipment is being sold at prices below the cost of production -- and unfairly benefits from tens of billions of dollars in subsidies including from entities of the Chinese government.
The petitions come months after a U.S. government investigation found Chinese companies were bypassing existing tariffs by assembling their panels in the other Asia nations.
Now that the petitions have been filed, the next step is for the U.S. Commerce Department to determine whether the manufacturers' petitions meet necessary requirements to initiate an inquiry -- with a decision expected in the next 20 days. It could take U.S. agencies nearly a year to determine whether import tariffs are warranted, but preliminary duties may be imposed in about four months.
Advocates of domestic solar development have warned against new trade investigations that they say will make projects more expensive and slower to develop. But Brightbill contends the U.S. has large stockpiles of unused panels -- enough to supply projects for at least 18 months.
"Solar is already the cheapest form of electricity -- and these cases will not change that," he said. "A level playing field where market-distorting anticompetitive behavior is effectively addressed gives U.S. solar manufacturers the ability to compete on a global scale without slowing down solar deployment."