Biden picks climate agenda over manufacturing allies on solar tariff loophole

President Joe Biden extended the Trump-era tariffs on solar-energy imports by four years Friday but dealt a blow to U.S. solar manufacturers by leaving in place an exemption that has allowed imports of panel technologies subsidized by China to flood the market.

The decision is a boon for renewable energy developers who will retain access to cheap overseas supplies, specifically the two-sided solar panels used by most large-scale solar projects, helping meet the administration’s climate targets. For U.S. solar manufacturers and union labor, who favored restrictions to safeguard American jobs, the move is a disappointment.

Though billed as a middle-ground approach, the Biden administration’s concession has left the companies reeling. Former President Donald Trump imposed the solar tariff regime in 2018 in a bid to boost U.S. manufacturing, but the loophole on bifacial modules, a nascent technology at the time, quickly came to undermine the policy, with attempts to claw it back yielding little success.

ADMINISTRATION DIVIDED OVER TARIFF EXEMPTION FOR CHINESE SOLAR PANELS

About 80% of solar panels are made in China, where the government has heavily subsidized the industry, relied on forced labor, and dumped panels to gain market share.

The International Trade Commission had recommended extending the tariffs arguing that imported solar equipment was a threat to U.S. manufacturers. The final decision was up to the president, however.

Under Biden, who entered office on a promise to boost American jobs, solar manufacturers pushed to close the loophole, hoping their efforts would align with the new administration’s worker and green energy goals. That didn’t happen.

Manufacturing is a small segment of the U.S. solar industry, with most jobs concentrated in installing panels, but lawmakers have called for bringing the solar supply chain home, concerned that Washington is ceding a major opportunity to China.

Ohio Sens. Sherrod Brown, a Democrat, and Rob Portman, a Republican, and Democratic Reps. Marcy Kaptur and Tim Ryan issued a statement Friday calling the bifacial exclusion a “disappointing, misguided decision” that “undermines American workers and manufacturers at a moment when domestic solar production is poised to dramatically expand.”

“The administration is missing the best opportunity in a generation to ensure the United States leads the way in manufacturing solar supply chain components,” the lawmakers said.

In a call last week, Sen. Brown urged Biden’s chief of staff, Ron Klain, to follow the ITC recommendation. The response was perfunctory, a source said. Portman, too, has actively pushed the White House, including Klain and Biden counselor Steve Ricchetti, receiving an equally cold reception.

“They would just say, ‘Got it. Thank you,’” this person said.

Spokespersons for Brown and Portman did not respond by press time to a request for comment.

Senior administration officials defended the move, arguing that the bifacial panel exclusion is necessary to ensure that projects continue at the pace and scale needed to meet Biden’s goals.

“Joe Biden ran for president on a promise to restore the backbone of this country, the middle class,” the officials said. “His North Star will always be a simple question: What is best for American workers and American industry?”

They called the announcement a significant step forward for the president’s plans to rebuild a strong North American solar supply chain that meets his clean energy and climate goals while providing good jobs and limiting dependence on foreign suppliers. The tariffs, they said, would not suffice in bringing back to core parts needed to make the panels.

“We’ve been consulting with all sectors of the solar industry, and they all agree that the Section 201 tariffs are not, on their own, going to bring back solar cell production or grow module production to a point where it can supply U.S. needs,” the officials said.

Republican Kansas Sen. Roger Marshall, who urged Biden to protect solar companies in a recent joint letter, told the Washington Examiner that the United States should not forfeit its renewable energy independence at the expense of short-term political ambitions.

“Domestic manufacturers simply cannot compete with Chinese imports propped up by government subsidies. If solar and other renewables are the future of energy production as those on the left claim, why does this administration want to hand control of that future to China?” Marshall said in a statement. “We need to be investing in American manufacturing and maintaining our energy independence, not relying on hostile nations to achieve short-term political goals.”

U.S. manufacturers have faced considerable hurdles as top Biden climate aides, including Gina McCarthy, the White House national climate adviser, advocate for policies that would lead to faster solar energy adoption.

McCarthy has said that the U.S. cannot achieve its climate goals without China, a source said, and pressed Klain, Ricchetti, as well as other assistants to the president on the issue while declining calls from lawmakers.

At the same time, China has ramped up polysilicon production, further subsidizing its production of a crucial solar component that human rights advocates have flagged as a concern. The world’s second-largest polysilicon maker is based in China’s far west Xinjiang region, where the government is carrying out a vast detention, surveillance, and forced labor program.

There is no cell production in the U.S., the main component of panels made from polysilicon. Biden’s proclamation Friday doubled the quota for cell imports. Officials said the U.S. largely imports these and other components from Southeast Asia.

The senior officials held up one option they said could render manufacturing competitive while pitted against imports: passing Biden’s trillion-dollar social spending bill. This, they argued, would lead to 25,000 new solar manufacturing jobs and provide tax credits to make manufacturing competitive with imports.

For now, Biden’s Build Back Better agenda is “dead,” according to Democratic West Virginia Sen. Joe Manchin, whose tightrope negotiations with the White House collapsed under heaping pressure last year.

Source Link…


Get a Free Customized Solar Quote for your Home or Commercial Property