A request for new tariffs on solar cell and module imports from Asia is feeding an intraindustry divide between project developers relying heavily on those products and the U.S. manufacturers competing for more market share.
Interest in solar energy is growing as there are more national and corporate commitments to reducing the use of fossil fuels, and domestic cell and module manufacturers want to grow their industrial base to help meet demand. Meanwhile, those representing the interests of firms engaged in downstream activities, such as panel assembly and installation, say they want more manufacturing growth, too, but they say the tariffs would hurt their businesses.
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The Department of Commerce recently announced it was moving forward with an anti-dumping/countervailing duties investigation to determine whether cell and module imports from Vietnam, Thailand, Malaysia, and Cambodia circumvent existing duties on Chinese imports.
California-based module manufacturer Auxin Solar filed the petition in February, arguing that “Chinese-origin components are being shipped to Malaysia, Thailand, Vietnam, and Cambodia to be completed into [photovoltaic] cells and modules for the purpose of avoiding AD/CVD duties.”
Auxin CEO Mamun Rashid praised Commerce’s decision on March 28 to move forward with its investigation and said it recognized “the need to investigate this pervasive backdoor dumping and how it continues to injure American solar producers.”
But the petition drew opposition from some trade groups, lawmakers, and multinational manufacturers, who made a mix of arguments against it, including that the petition lacked a factual basis and that it threatens to upend solar jobs and the Biden administration’s green energy goals.
The Solar Energy Industries Association, which represents thousands of companies on the development and assembly side of the industry, as well as some multinational manufacturers, quickly got out in front of Auxin’s petition effort, as they did with a similar petition filed with Commerce last year by an anonymous group of manufacturers.
“If you’re doing cell manufacturing and module manufacturing together — or selling independently — it is a significant manufacturing operation, and for the government to conclude otherwise, [would go] against a decade of precedent,” John Smirnow, SEIA’s general counsel and vice president of market strategy, said after Auxin filed its petition.
SEIA also argued that the mere filing of the petition would be disruptive to outstanding projects and that since Commerce took it up, it would worsen the outlook for an industry that is already managing higher shipping and product costs due to inflation.
Solar module manufacturer Heliene was not a party to the petition, but its president, Martin Pochtaruk, pushed back against SEIA’s position, saying Commerce was obligated to open an investigation.
“I might not necessarily agree on a punitive measure as a way of incentivizing manufacturing. However, I do believe that if there is a manufacturer of any product that goes to the Department of Commerce or requests an investigation that, by statute, [Commerce] has the obligation to investigate,” Pochtaruk told the Washington Examiner. “If there’s nothing wrong, there’s nothing to be afraid of.”
Opponents of tariffs, including the Section 201 tariffs that former President Donald Trump imposed and President Joe Biden just renewed, have also argued they have failed to grow the solar manufacturing base in the United States.
“Tariffs are not how you grow a solar manufacturing base,” Smirnow told the Washington Examiner. “They’re not designed to incentivize companies to build factories to expand capacity. … They’re not an industrial policy growth tool.”
Pochtaruk’s Heliene, which is based in Ontario, is one of just two solar manufacturers in Canada, and, in addition to its Canadian facilities, it operates a facility in Minnesota and Florida. He said the tariffs accomplished precisely what they were designed to do.
“Our factory in Minnesota was the first manufacturing line built as a result of the imposition of [solar tariffs] back in 2018,” Pochtaruk said. “It really worked.”
He also challenged forecasts that tariffs have been or will be devastating for solar deployment.
SEIA’s numbers show that solar’s share of new electricity-generating capacity additions has increased substantially since 2018, and new solar additions reached a record of 23.6 gigawatts in 2021.
Smirnow has noted the competing storylines between established growth and future growth potential.
“That’s a complicated narrative, right? ‘You’re doing well. You’re growing,'” he said in December. “We could be doing much better if we didn’t face all these headwinds, especially these tariffs.”
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There is one thing all solar interests seem to agree on uniformly: the need for something like the incentives of Biden’s defunct “Build Back Better” agenda to pass.
SEIA’s leaders have repeatedly said the tax credits for solar, which had floated around with the proposal before Sen. Joe Manchin called off negotiations in December, are exactly what’s needed to enable more growth in solar deployment and manufacturing.
Pochtaruk said, “We are pushing for … any variation thereof of an incentive that could help us accelerate the payback on the capital expenditure.”
