New analysis finds potential tariffs could ‘seriously hamper’ solar deployment in US: ACORE

Brief description of the dive:

• The potential new tariffs, resulting from a petition seeking new antidumping and countervailing duties on certain imported solar cells, could increase “the cost of U.S.-made modules by 10 cents per watt and the cost of imported modules by 15 cents per watt,” according to a report released Tuesday by Clean Energy Associates, commissioned by the American Renewable Energy Council.
• “These higher prices, combined with other headwinds including domestic factors and trade restrictions already in place that impact the industry’s trajectory, could severely hamper America’s progress in solar deployment,” ACORE said in a statement.
• Tim Brightbill, chief legal officer of the American Alliance for Solar Manufacturing Trade Committee, which filed the petition, said: “The report itself shows that trade issues have never historically affected demand for solar energy and indicates that (an appropriate) solution would make U.S. manufacturing more competitive.”

Diving Insight:

The CEA report found that AD/CVD tariffs would increase the total cost of assembling modules in the U.S. from 22 cents per watt to 32 cents per watt, and the total cost of modules in Southeast Asia from 24 cents per watt to 40 cents per watt. However, the report notes that “no crystalline silicon wafers or cells are currently manufactured in the U.S.” and claims that rising import prices could lead to reduced financing for solar panel production.

Brightbill, partner at the law firm Wiley Rein said: “Despite evidence of illegal trade practices, the organization behind this report is committed to maintaining the status quo.”

The industry alliance that filed the petition – consisting of First Solar, Hanwha Qcells, Convalt Energy, Meyer Burger, Mission Solar, REC Silicon and Swift Solar – argues that certain imported crystalline silicon solar cells from Cambodia, Malaysia, Thailand and Vietnam pose a threat to the domestic solar market.

The controversial petition divided opinion in the solar industry after it was filed in April. Clean energy groups Advanced Energy United, ACORE, the Solar Energy Industries Association and the American Clean Power Association issued a joint statement calling the petition a “potential threat” to the nation’s solar supply chain.

“The United States will need to import up to 41 GW of cells and/or modules to meet projected U.S. installations by the time Section 201 regulations are phased out in February 2026; importing cells during this time will pose an additional financial burden on buyers,” the CEA report said.

ACORE said in a statement that the new analysis shows that harm to the solar market has already manifested itself in the form of “(surges in) prices” since the petition was filed with both the U.S. Department of Commerce and the U.S. International Trade Commission on April 24. The ITC issued a positive preliminary injury determination to the petition in June, allowing the case to proceed.

The CEA analysis draws similarities between the case and a similar petition filed in 2022 with the Commerce Department by California-based solar panel installer Auxin Solar, which accused makers of solar panels imported from the same four Southeast Asian countries of circumventing tariffs on components made in China.

The case has also been controversial due to its potential impact on the domestic solar industry, with the CEA saying it has led to “significant price increases compared to 35 (cents per watt) to 55¢/W, which was only relaxed by presidential action,” referring to a two-year pause issued by President Joe Biden on any new tariffs resulting from the investigation. The pause expired in June.

In an April statement, the industry alliance said the petitioners were filing the request because “companies known to be circumventing tariffs are not expected to pay tariffs when the moratorium expires in June, as their supply chains in Southeast Asia mean they are no longer in breach of technical regulations as set out in the circumvention decision.”

Brightbill said in April that any enforcement resulting from the case was unlikely to harm U.S. solar supplies because “there is already 30 GW of imported solar power in storage, representing nearly two-and-a-half years of demand.”

During a Tuesday webinar hosted by ACORE, CEA vice president and report co-author Dan Shreve said, “There was a significant amount of import capacity late last year and early 2024 — more than usual,” but added he couldn’t be certain what impact the backlog of deliveries would have on prices.

So far, Shreve said, “We think some of that price increase has been somewhat mitigated by the fairly significant amount of inventory that has been made available here in the U.S.”