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Solar energy projects are
grinding to a halt in the US amid investigation into parts from China
By
Ella Nilsen,
CNN
Fri May 6, 2022
Racking systems to hold solar panels sit
empty on top of an old strip mine in Portage, Pennsylvania, on Monday,
April 25.The fallout from a trade probe is rippling through the US
solar industry, delaying projects and threatening to slow the
renewable energy transition.
The Commerce Department
launched the probe in March into whether four countries in
Southeast Asia that supply about 80% of US
solar panels and parts -- Cambodia, Malaysia, Thailand and
Vietnam -- are using components from China that should be subject to
US tariffs.
The fallout within the industry has
been significant.
A
survey in late April by the Solar Energy Industries Association,
a non-profit trade association, found 318 solar projects in the US
had already been delayed or canceled, and several CEOs told CNN they
expect more to follow. Industry leaders fear the probe could also
have a devastating impact on the solar workforce.
The Commerce Department has defended it as
a transparent and necessary process, but several solar industry
experts and executives told CNN it has also essentially frozen most
solar imports into the US because of the threat of steep,
retroactive tariffs.
"With this administration and this much
support, we're in a position where we're going to be laying off
people in the renewables industry," George Hershman, CEO of
utility solar contractor SOLV Energy, told CNN. "While you say all
those things we agree with, we're getting crushed because we
literally can't buy a module today. It's so frustrating."
The investigation was launched after one
small US-based company, Auxin Solar, filed a complaint in
February. Auxin CEO Mamun Rashid told CNN that the complaint "was
existential" for his company.
"When prices of finished panels from
Southeast Asia come in below our bill of materials cost, American
manufacturers cannot compete," Rashid said, adding that "if foreign
producers are circumventing U.S. law and causing harm to U.S.
producers like Auxin Solar, it needs to be addressed."
Rashid told CNN it's "lamentable" that
frustration is aimed at his company, rather than the "foreign
suppliers" that he says are circumventing US law. Rashid also noted
that Auxin is "here and can quickly scale up to meet needs of
utilities within 2 to 3 quarters if we have the purchase order
today."
Solar industry leaders have been
communicating with the Commerce Department and have also
communicated their concerns about the probe to Biden's top climate
officials -- including McCarthy and US Climate Envoy John Kerry -- a
person familiar with the conversations said.
"The administration has been in touch with
and is engaging with all kinds of solar stakeholders including the
trade associations but also labor, communities, and NGOs," a White
House official told CNN.
'The worst moment'
The Commerce probe comes on the heels of
last year's ban on solar panels and parts that were suspected of
having links to forced labor in China's Xinjiang Province.
The Department of Homeland Security
directed US Customs and Border Protection to issue a Withhold
Release Order, which banned imports made by Chinese company Hoshine
Silicon Industry Co., after the government alleged the company uses
forced Uyghur labor.
"Obviously, the industry absolutely needed
to address any concerns about forced labor, but the implementation
of that [order] was far from smooth," Solar Energy Industries
Association President Abigail Ross Hopper told CNN.
At ports around the country, CBP agents
seized and detained any solar products they suspected had links to
Hoshine, unless companies could prove they did not.
US Customs and Border Protection
statistics provided to CNN note the agency detained 734 shipments
valued at $246 million, which the agency said is just 1.86% of the
total value of all solar imports into the United States. But
Hershman said the order ultimately led to a chilling effect across
the industry, where companies withheld shipments for fear of being
caught in an overly broad net at US ports.
"If you have materials detained, you don't
want to ship more," Hershman said.
Electricians with IBEW Local 3 install solar
panels on top of the Terminal B garage at LaGuardia Airport in
November 2021.
Solar CEOs and industry analysts told CNN
that while the CBP order was eventually resolved with a good outcome
for the industry, the impact of the Commerce investigation is like
whiplash.
"Solar is a big mess right now," said
Marcelo Ortega, an analyst for Rystad. "This seems to be the worst
moment for this to happen."
This year was supposed to be a banner
year for US solar growth. Independent energy research firm Rystad
estimated the US would add another 27 gigawatts of solar energy
this year.
Now -- between the Commerce Department
probe, the border seizures, the high cost of solar components and
no new legislation in Congress to grease the wheels for more
renewable energy -- Rystad estimates the US might only add around
10 gigawatts in 2022.
Ortega said the backslide threatens
Biden's own climate goal to slash planet-warming emissions in half
by 2030. The US would have to install around 50 gigawatts of solar
photovoltaic capacity each year from 2022 to 2030 to keep Biden's
goal on-track, according to Ortega's analysis.
Ross Hopper told CNN that the industry
is looking for certainty from the markets and from governments,
but that it's getting none of that right now.
"There's certainly been this steady
cadence of challenges that keep getting thrown our way right at
these moments of opportunity," Ross Hopper told CNN.
Commerce defends the probe
At a
recent hearing on Capitol Hill, Secretary of Commerce Gina
Raimondo told lawmakers that strict trade laws required her
department to initiate and complete an investigation. The
department is expected to issue a preliminary finding on the
investigation by late August, but a final determination could
take as long as January 2023, a Commerce Department official
told CNN.
"My hands are very tied here,"
Raimondo said at the hearing. "I'm required by statute to
investigate a claim that companies operating in other countries
are trying to circumvent the duties, and I'm required by statute
to have a fulsome investigation."
The 6 megawatt Stanton Solar Farm
outside of Orlando, Florida.
The Commerce official stressed to CNN
that circumvention laws are "completely removed from political
considerations."
"We're committed to holding foreign
producers accountable to playing by the rules," the official told
CNN.
Nevertheless, Raimondo has been
questioned and criticized by politicians in both parties. A
bipartisan group of 19 senators wrote to Biden this week asking
for an expedited preliminary decision on the investigation.
And at a recent hearing, Nevada Sen.
Jacky Rosen, a Democrat, pressed Raimondo on her "very serious
concerns" about the investigation.
"This will jeopardize tens of thousands
of good-paying American solar jobs," Rosen said. "If we lose these
jobs, they won't come back."
Democratic Gov. Gavin Newsom of
California and Republican Gov. Eric Holcomb of Indiana also
recently wrote to Raimondo expressing concern that the
investigation could impact solar growth and jobs in their states.
Although solar CEOs and industry
analysts welcome the idea of a domestic solar supply chain, those
who spoke with CNN said the Commerce Department investigation
won't be the catalyst -- the industry needs Congress to
incentivize it.
"If what we're talking about is
incentivizing domestic manufacturing, this is not the way to do
it," said Ben Catt, CEO of utility-scale solar company Pine Gate
Renewables. "This is going to have not just a months but
years-long impact to the solar industry. We and the administration
need to be looking at how we will double and triple the renewables
deployment in this country. And what we're doing is moving in the
opposite direction."
Green Play Ammonia™, Yielder® NFuel Energy.
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www.exactrix.com
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