This week’s Commerce decision on antidumping solar panel tariffs could make or break the U.S. solar industry
“We’re going to either lay off hundreds of employees or hire hundreds of employees.”
Those are the only two avenues, Troy Ochoa, VP of solar construction for Wanzek Construction, said at a press conference today about an upcoming decision by the Department of Commerce on anti-dumping and countervailing (AD/CV) duties on solar panels imported from Southeast. . Asia. The department is considering tariffs of 50 to 250% on imported solar panels from Malaysia, Thailand and Vietnam, which will take effect this Thursday, September 30. three countries, many large-scale solar installers and developers have stated that this week’s Commerce decision is a drastic fork in the road for the US solar industry and its thousands of jobs.
In August, a group of anonymous U.S. solar manufacturers — calling themselves the American Solar Manufacturers Against Chinese Circumvention (A-SMACC) — filed a petition with the Department of Commerce requesting an investigation into Chinese silicon solar panel manufacturers operating in Malaysia. . Thailand and Vietnam as a way to avoid AD/CV charges.
Solar advocacy group SEIA held a press conference today to discuss the potentially devastating impact on the U.S. solar industry if the Commerce Department allows additional tariffs on panel imports from the three countries.
Since 2012, AD/CV levies have been in effect against Chinese solar manufacturers. Any silicon solar energy imports from China come with an additional tax from the Ministry of Commerce. Some Chinese companies have relocated some of their production capacity to other Southeast Asian countries in a possible attempt to evade the tax (according to the petition).
A-SMACC asks the Ministry of Commerce for a deeper look at specific Chinese companies operating in the three countries mentioned:
- Malaysia: JinkoSolar, LONGi (and affiliates), JA Solar
- Thailand: Canadian Solar, Trina Solar, Talesun Solar, Astroenergy
- Vietnam: Trina Solar, Canadian Solar, Sunergy, Boviet Solar, GCL, LONGi (and affiliates), JinkoSolar
The petitioners want additional tariffs ranging from 50 to 250% on imports from the above companies, effective immediately. According to SEIA, a new AD/CV tax investigation would immediately disrupt U.S. solar panel supplies, as the three countries accounted for 59% of the total supply of crystalline silicon solar modules.
With no domestic silicon solar cell manufacturers and a domestic module production capacity of less than 8 GW, the United States depends on solar module imports to meet demand. The country is expected to install 30 GW of solar in 2022 and 32 GW in 2023. Without supplies from Malaysia, Thailand and Vietnam, SEIA predicts installation will drop to less than 26 GW in 2022 and 18 GW in 2023 — or a loss of 18 GW over the next two years.
One reason behind A-SMACC’s petition is that further tariffs would boost domestic production, but with the time and financial investment required to start domestic cell production and increase module assembly capacity, installation numbers will suffer. And any drop in projected solar installations would put the country further behind meeting the Biden government’s goal of 80% clean energy by 2030.
“The growth of the U.S. solar supply chain is critical,” said Abigail Ross Hopper, SEIA president and CEO. “Long-term policies that boost solar demand and encourage a healthy manufacturing sector could fuel a strong US manufacturing renaissance. However, unnecessary and harmful tariffs are not the solution.”
Imported solar panels are already being affected, with SEIA reporting that companies are being forced to use existing module inventory to make up for import shortages, increasing project costs by 4 to 20%. Some EPCs are already noticing module shortages.
George Hershman, president of Swinerton Renewable Energy, attended today’s press conference. The country’s largest large-scale solar EPC has about 3,000 employees across the country, and Hershman said all those jobs are currently at stake.
“Module deliveries to the US have been frozen. This is not something in the future. Just filing this petition has essentially frozen the market,” he said. “We can’t get module manufacturers today to sign purchase orders that we need on short notice to deliver projects due to concerns about whether there will be a rate of 50 to 250% will be when those modules reach port.No one can take that cost risk, so it essentially stops projects going ahead.”
Hershman stated that Swinerton has a contract for 4.5 GW of solar installations by 2022 and these rates have jeopardized “nearly 100% of that work”. “To say this is a minor issue or a nuanced one is clearly an understatement. This poses significant risk to our business and those thousands of employees. This is about whether or not we hire 3,000 or 4,000 workers to carry out the projects we have under contract or whether we start laying off workers within 30 days,” he said.
Ochoa stated that an ongoing Wanzek project in Texas has already been delayed as module companies prevented product shipments due to the effect of tariffs that could fall this week.
“[At the Texas project], two weeks ago it was announced that modules will be delayed by five months,” he said. “That’s hundreds of jobs. Those jobs have now been delayed by five months, and the potential even longer. If you kill projects, you destroy jobs.”
Last week 200 US solar companies sent a letter to Trade sec. Gina Raimondo outlines the impact these tasks could have on the livelihoods of 231,000 U.S. solar workers and on the country’s efforts to fight climate change. Signatories include manufacturers, developers, installers, financiers and service providers from across the solar supply chain. SEIA asks the Ministry of Commerce to reject the petition.
The industry expects a decision from Commerce on September 30.