New tariffs will stifle US solar progress, ACORE analysis says

Posted on July 15, 2024 by Kim Riley

Antidumping and countervailing duties (AD/CVD) are particularly damaging to the photovoltaic industry, and potential new tariffs on solar cells and panels from Southeast Asia could raise the cost of modules produced in the U.S., according to a new analysis commissioned by the American Council on Renewable Energy (ACORE).

These higher prices, combined with other headwinds including domestic factors and trade restrictions already in place that affect the industry’s trajectory, could severely hamper America’s progress in deploying solar power, according to an analysis by Clean Energy Associates.

“Today, solar energy is one of the most affordable and reliable sources of energy we have to power our economy,” said ACORE President and CEO Ray Long. “Introducing uncertainty into the marketplace slows economic growth and the good-paying jobs that clean energy creates, undermines U.S. climate goals and will inevitably raise energy costs for American families.”

New analysis shows that solar energy prices have already begun to rise rapidly since the petition was filed with the U.S. Department of Commerce and the U.S. International Trade Commission on April 24.

The analysis found that potential new duties resulting from AD/CVD investigations on solar cells and modules imported from Cambodia, Malaysia, Thailand and Vietnam could increase costs to levels that would significantly reduce the supply and installation of solar panels in America.

Specifically, the imposition of new, unpredictable AD/CVD tariffs on solar cells and panels from these countries could increase the cost of U.S.-produced modules by 10 cents per watt and the cost of imported modules by 15 cents per watt, leading to an increase in the net purchase price of modules for purchasers.

In turn, projects with marginal economic significance may not meet investment criteria and be canceled, which would limit the deployment of solar projects, slow the U.S. progress toward achieving climate goals and negatively impact the number of jobs associated with technology deployment, the analysis reads.

“Some U.S. consumers could see an even greater impact as rising solar module prices translate into higher energy costs,” the analysis said.

“This is not the right way to do things and could inadvertently give away the U.S. leadership in solar to other countries,” Long said.

A new analysis shows how the U.S. solar sector is currently in good shape thanks to a rapidly expanding domestic solar supply chain. The U.S. solar industry must increase installed capacity from 177 gigawatts (GW) to more than 500 GW to meet the government’s goal of a 50-52 percent reduction in greenhouse gas emissions by 2030.

Although the United States is actively expanding its photovoltaic module production capacity, scientists say more time is needed, especially to increase cell production capacity and meet demand.

And if additional tariffs on solar cells are imposed, US module manufacturers will likely suffer losses as they are dependent on imported solar cells to meet their current production needs.

Analysts say that could undermine the development of a strong domestic solar supply chain and threaten U.S. factories and the jobs they provide.