WASHINGTON, June 6 (Reuters) – President Joe Biden gave up tariffs on solar panels in four Southeast Asian countries for two years and cited the Defense Manufacturing Act to boost solar panel production at home, the White House said. on Monday, confirming a Reuters report.
The duty exemption applies to panels from Cambodia, Malaysia, Thailand and Vietnam and will serve as a “bridge” as US production increases, the White House said.
Shares in U.S. solar companies, including SunPower Corp. (SPWR.O), Enphase Energy Inc (ENPH.O) and Sunrun Inc (RUN.O), rose after Reuters reported earlier that Biden would issue a proclamation that ensures that panels account for about 80 percent of US imports will not be subject to customs duties that could be imposed retrospectively as part of a Department of Commerce investigation.
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The move comes in response to concerns about freezing solar projects across the country and the resulting impact on the administration’s plans to combat climate change. An investigation released in March examined whether imports of solar panels from the four countries circumvented tariffs on goods made in China.
The study prompted the largest solar trading group to reduce its installation forecasts for this and next year by 46% as developers, including NextEra Energy Inc (NEE.N), Southern Co (SO.N), warned of long delays of projects, read more.
The White House said the Defense Manufacturing Act would also be used to expand the production of insulation for buildings, heat pumps, transformers and equipment for “clean fuels generated by electricity”, such as electrolyzers and fuel cells.
“With a stronger arsenal of clean energy, the United States can be an even stronger partner for our allies, especially in the face of (Russian President Vladimir) Putin’s war in Ukraine,” the White House said in a statement.
Manufacturing is a small part of the solar industry in the United States, with most of the jobs concentrated in project development, installation and construction. Proposed legislation to encourage local solar production is currently stalled in Congress.
Heather Zihal, chief executive of the American Clean Energy Association, said Biden’s announcement would “rejuvenate the construction and domestic production of solar energy by restoring business predictability and security.”
The Commerce Department’s investigation, launched in response to a complaint from a small solar panel supplier, Auxin, essentially halted the flow of solar panels, which account for more than half of U.S. supplies and 80 percent of imports.
Auxin’s chief executive, Mamun Rashid, criticized the White House’s move as “opening the door wide to China-funded special interests to defeat the fair application of US trade law.”
The leading panel maker in the United States, First Solar, said the administration’s move “undermines American sun production.” Its shares fell more than 2% in the middle of the day on the Nasdaq.
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Report by Jeff Mason; additional report by Nicola Groom; edited by John Stone Street and Tomasz Janowski
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