There has been plenty of chatter in the renewables market over the past week about President Biden’s pause on tariffs for imported solar products, which is intended to increase the supply of inexpensive solar panels and jumpstart the many stalled solar projects in the United States.
The decisions has sparked debates throughout the solar industry, with some domestic solar panel manufacturers concerned that a flood of products from Pacific Rim manufacturers from China and other nations in Southeast Asia will hurt their market share, and others, including companies on the installation side of the industry, glad to have a source of supply after scrambling for inventory over the past few months. A June 6 article in the New York Times said in 2020, 89% of the solar modules used in the United States were imported and that Southeast Asia accounted for most of these shipments.
Biden’s announcement on the tariffs was part of an emergency proclamation to “ensure the United States has access to a sufficient supply of solar modules to assist in meeting our electricity generation needs.” An ongoing anti-dumping probe by the U.S. Department of Justice into some solar cells imported from Southeast Asia will continue.
NextEra Energy Inc., one of the nation’s largest electric utilities, has built a larger portfolio of utility-scale solar farms. John Ketchum, NextEra’s president and CEO said, “The Biden administration’s announcement of a two-year pause on new solar tariffs is an important step to help the solar industry recover from the uncertainty of the last three months. I want to thank the administration for recognizing the challenges that trade uncertainty presents to our industry and the country, and for taking this important action. We look forward to working with the administration on this effort and putting hardworking Americans back to work in the solar industry.”
Heather Zichal, CEO of the American Clean Power Association (ACP), a large lobbying group for the renewable industry, also issued a statement in support of the pause in these tariffs, and said it would spark continued investment by solar developers.
“The U.S. solar industry is actively making investments to further increase the scale of the domestic manufacturing sector, including recent announcements to expand U.S. module production facilities; create new manufacturing plants for components like steel trackers; and work with allied trading partners to unlock the potential for inputs (like polysilicon) from the United States. As one example, ACP has exclusively learned that a large U.S. developer is pursuing a domestic solar panel manufacturing facility that could have up to 5GW of production. Panel production at this facility would begin by the fall of 2023 and would put 1,000 American workers on the job building America’s clean energy future.”
ACP’s Zichal said the solar industry didn’t install as many utility-scale projects as expected in 2021 because of the shortage in PV panels. ACP’s recently released Clean Power Annual Market Report 2021, showed that wind, utility solar and battery storage power capacity in the U.S. topped 200 gigawatts (GW) after 28.5 GW of clean energy projects came online in 2021.
However, ACP said in the report’s executive summary, “Installations were flat when compared to 2020 levels due to several policy headwinds facing the wind and solar sectors. ACP found that maintaining last year’s project volume would provide only 35% of what is needed to reach a net zero grid by 2035.”
The study also said, “Despite recent growth trends, unrelenting challenges from the pandemic and global supply chain issues slowed clean power growth. Roughly 10 gigawatts of clean power capacity originally expected online in 2021 were delayed because of various policy headwinds.
“Looking to 2022 and beyond, the uncertainty of tax credits for renewable energy projects, the availability of solar panels, supply chain issues and inflation are all expected to have a concerning impact on our ability to deliver growth. Further, continued and arguably heightened uncertainty brought about by challenges to existing trade precedent like this year’s Department of Commerce inquiry into solar module tariffs are already taking a toll as we see projects canceled and delayed.”
ACP said the report that in total, the U.S. utility solar sector installed a record 12,433 MW of capacity in 2021, bringing total cumulative operating capacity to 60,733 MW. Solar capacity installations grew by +20% year-over-year, although over 6 GW of projects were delayed in 2021. Delays were due to supply chain constraints and trade barriers. Solar imports into the U.S. fell -18% due to the regulatory barriers expected to obstruct future industry growth.