President Biden signed an executive order on June 6, citing the Defense Proceedings Act to speed up local production of solar panels.
The action, taken in connection with a two-year break for additional solar tariffs from 4 Southeast Asian countries, signals the administration’s public commitment to reduce US dependence on foreign imports in a Chinese-dominated market.
“What the president’s plan is to do is keep the jobs we already have in the United States, in the United States producing things like shelving and tracking, inverters, all those commercial jobs installing existing panels, and installers who make solar panels. roof systems, ”Senator Martin Heinrich (D, NM), a member of the Senate Committee on Energy and Natural Resources, told Yahoo Finance Live (video above). “And then it builds a bridge to more actual panel production in the United States.”
At the same time, Heinrich added, it is unrealistic to build America’s clean energy infrastructure without relying on Chinese imports, given America’s current footprint in space.
“A huge part of the existing jobs in the creation of projects on the scale of public utilities, as well as the creation of distributed projects for roofs, could not exist in the next few years [without imported parts]”he said.” We need to triple our internal capacity to really have the impact we want. And the president’s plan does that. “
US Senator Martin Heinrich (D-NM) speaks at a hearing of the Senate Committee on Energy and Natural Resources on Capitol Hill in Washington, DC, USA, January 11, 2022. REUTERS / Sarah Silbiger
The president’s plan specifically puts the United States on track to triple domestic solar production capacity by 2024, according to the White House. This will lead to a total clean solar capacity of up to 22.5 gigawatts – enough to power more than 3.3 million homes.
Working against the plan is the inherent challenges that come with building ambitious clean energy, given the limited existing production capacity in the United States.
“You can’t ask people who work in these fields to just wait two years.”
In March, the Commerce Department launched an investigation into Chinese solar companies accused of circumventing US tariffs by directing US destinations to four Southeast Asian countries.
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And while officials have yet to find evidence of violations, the potential for additional tariffs on parts of countries that control approximately 80 percent of the solar modules used in the United States has led to the suspension of many existing projects.
Within weeks, the Association of the Solar Industries Association (SEIA) said more than 300 local solar projects had been canceled or delayed, with some companies considering layoffs. The trade group also reduced its annual installation forecast by nearly 50 percent.
“You can’t ask people who work in these areas to just wait two years to start working again,” Heinrich said, referring to the two-year hiatus. “They need to be constantly building capacity over the next two years, which is why the two-year release is so important.”
A new floating solar panel system is located at Big Muddy Lake in Camp Mackall, while the U.S. military hosts an event to cut the strip to uncover the solar power system on June 10, 2022 at Camp Mackall in Aberdeen, North Carolina. (Photo by Melissa Sue Gerrits / Getty Images)
The United States has been collecting anti-dumping and countervailing tariffs on solar imports from China since 2012 – when the Obama administration first imposed tariffs – after concluding that Chinese companies benefited from generous government subsidies and sold at prices well above -lower production costs. China currently controls more than half of the world’s polycrystalline silicon, which is a critical supply used in solar panels.
China’s industrial strength has been renewed because of where its solar components are produced: Approximately 80% of China’s polycrystalline silicon supplies are made to the northwestern region of Xinjiang, the industrial hub where the United States accused Beijing of “genocide and crimes against humanity in its treatment of Uighurs and other Muslim minority groups.
Heinrich suggested that the best solution was to follow the Biden administration’s plan.
“Instead of pitting one group of jobs against another in the United States, what the president really said is, ‘We’re going to come up with a plan to make sure we have both,'” Heinrich said. “So much of our inflation is tied to fossil fuel prices. So the sooner we can make this transition to clean energy, the more we ease inflationary pressures there as well. “
Akiko Fujita is a presenter and reporter for Yahoo Finance. Follow her on Twitter @AkikoFujita
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