US trade officials will launch an investigation that could result in tariffs on solar panels imported from four Southeast Asian nations namely Malaysia, Thailand, Vietnam and Cambodia. This move is expected to adversely affect clean energy project developers that rely on cheap imports to keep costs down.
The Commerce Department’s announcement is a victory for Auxin Solar, a San Jose, California-based solar manufacturer which has requested the probe, arguing that Chinese manufacturers shifted production to those nations to avoid paying US duties in place for nearly a decade on Chinese-made solar goods.
Auxin’s petition is the latest in a string of efforts by US solar producers to stem the flow of cheap Asian panels that they argue make their products unable to compete in the market.
Imports from the four countries account for about 80 per cent of the panels expected to be installed in the United States this year, according to the American Clean Power Association industry group.
Meantime, solar industry trade groups said the investigation alone would immediately restrict project development and harm US. progress in addressing climate change. President Joe Biden has set a goal of weaning the US electricity sector off of fossil fuels by 2035, a target that could propel solar to supply up to 40 per cent of the nation’s electricity needs – up from 3 per cent currently.
“This decision effectively freezes development in the US solar industry,” association CEO Heather Zichal said on a conference call with reporters. “Frankly, the Commerce Department’s action to initiate this investigation is a disaster for our industry.”
In a memo posted on a Commerce Department website, officials said Auxin had provided information indicating that solar companies operating in the four countries are subsidiaries of large Chinese producers and that products made there would be subject to US countervailing and anti-dumping duties if made in China.
The Commerce Department said it will issue a preliminary determination within 150 days.
Auxin chief executive Mamun Rashid welcomed the decision. “We are grateful Commerce officials recognised the need to investigate this pervasive backdoor dumping and how it continues to injure American solar producers,” he said in a statement.
US solar trade groups lobbied heavily against the Commerce Department taking up the petition. On 28 March, they said projects will now be forced to decide whether they can move forward given the potential for new tariffs that could sharply increase their cost. Solar panels make up about half the cost of a large-scale system.