Commerce

Commerce Division places photo voltaic business on ice

The U.N. secretary-general not too long ago warned that the world is “sleepwalking right into a local weather disaster.” So it’s a tragic irony that essentially the most speedy and sweeping menace to President Joe Biden’s clear power and local weather agenda comes not from the current push for extra fossil gasoline growth or the intransigence of local weather deniers, however from a little-noticed however devastating choice on the Biden administration’s Commerce Division that’s bringing America’s booming photo voltaic progress to a screeching halt.

On March 28, the Division of Commerce initiated a “circumvention inquiry” that opened the door to the imposition of retroactive duties (efficient to the date the investigation was introduced) of as much as 250% on imports of key photo voltaic power parts from 4 Southeast Asian nations (Cambodia, Malaysia, Thailand, and Vietnam). That is no small matter. These nations offered an estimated 84% of all American imports of photo voltaic panels final yr and half of the photo voltaic cells which can be routinely relied upon by home U.S. photo voltaic panel producers.

On account of the immense uncertainty in value unleashed by this choice, we’re already seeing a dramatic and speedy lower within the funding in and growth of photo voltaic power in the USA. In any case, how do companies method monetary selections regarding funding in new photo voltaic initiatives when the prices are unknowable — and will greater than double with out discover?

The choice additionally has a direct influence on the supply of latest photo voltaic modules within the U.S., with international suppliers predictably selecting to ship their photo voltaic merchandise to different nations the place there may be not the identical threat of punitive tariffs. In
a current survey
of over 400 corporations, the Photo voltaic Vitality Industries Affiliation discovered that 78% of corporations that buy or use photovoltaic modules have been instructed anticipated shipments had been canceled or delayed. Greater than 80% of home producers, the group the Commerce Division motion was supposedly meant to profit, count on extreme or devastating results as they lose entry to key photo voltaic parts. Two-thirds of the businesses responding to the survey report that 70% or extra of their workforce is now in danger.

Formally, the Commerce Division is solely “investigating,” however the
announcement
within the Federal Register has peremptorily made the monetary selections crucial to photo voltaic power growth perilous, if not unattainable, for months to come back. The end result hamstrings an essential driver of U.S. financial progress and job creation and a vital a part of any efficient effort to handle local weather change. To not point out that the U.S. commerce repercussions of an opposed Commerce Division choice would lengthen effectively past Southeast Asia, affecting the entire of the renewable power business and undercutting each our financial objectives and the local weather crucial.

Such unlucky outcomes may very well be averted if the White Home and the Commerce Division had been to contemplate the repercussions of this plan of action extra rigorously and transfer to reassure the nation’s renewable power market by unequivocally eliminating the potential utility of latest retroactive tariffs on this case and others prefer it. Considerations about Southeast Asian suppliers are constructively addressed not by paralyzing the American photo voltaic sector, however by enacting insurance policies that strengthen our home provide chain, such because the clear power tax proposal that’s being negotiated that gives superior manufacturing tax credit and long-term tax incentives for solar energy.

With out such immediate motion to reassure the clear power market, U.S. renewable power deployment in 2022 is prone to drop precipitously from not solely 2021 ranges, but additionally from ranges achieved by way of the prior 4 years. A setback of this magnitude will put the Biden administration’s clear power objectives out of attain, undermine one of many nation’s fastest-growing sources of latest jobs, and make all of it however unattainable to attain the emission reductions scientists say are essential to keep away from the worst impacts of local weather change.

Gregory Wetstone is the president and CEO of the American Council on Renewable Vitality, a nationwide nonprofit group that unites finance, coverage, and know-how to speed up the transition to a renewable power economic system.

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