The U.S. Department of Commerce (DOC) has determined that four of the eight Chinese solar companies it investigates are “attempting to circumvent U.S. duties by performing minor processing in one of the Southeast Asian countries before shipping in the USA”. Here’s what that means for the US solar industry.
December 5 update: One of the four solar companies, Vina Solar, belongs to Xi’An-headquartered LONGi Green Energy Technology, the world’s largest solar power manufacturing company.
LONGi said today that it will provide evidence to the DOC that Vina complies with US laws. The solar giant said in a statement to Reuters:
Then, the US Department of Commerce will conduct an on-site audit in the coming months to verify the authenticity of the survey information. During this period, we will actively provide evidence that we comply with US commercial law and do not circumvent it.
Electrek will continue to monitor this story.
The DOC found that the four Chinese companies that attempted to circumvent U.S. duties by processing in Southeast Asia are:
- BYD Hong Kong, Cambodia
- Canadian Solar, in Thailand
- Trina, Thailand
- Vina Solar, Vietnam
The DOC’s findings are preliminary, and the agency will conduct in-person audits in the coming months. The DOC also noted that a ban will not be implemented on products from Cambodia, Thailand, and Vietnam:
Companies in these countries will be allowed to certify that they are not circumventing [antidumping duty (AD) and countervailing duty (CVD) orders]in which case the findings of circumvention will not apply.
The DOC also notes:
In addition, certain companies in Malaysia, Thailand and Vietnam did not respond to Commerce’s request for information in this investigation and, in accordance with long-standing practice, will be considered to have circumvented.
As Electrek reported in mid-May, the DOC launched an investigation into whether Southeast Asian solar cell makers are using Chinese-made parts that would normally be subject to a tariff.
This investigation has destabilized the US solar industry, which depends on imports of solar modules to meet growing demand. The majority of the U.S. solar industry then claimed that the DOC’s investigation would harm the U.S. solar industry and called for the investigation to be dismissed.
On June 6, President Joe Biden removed tariffs for 24 months on solar panels made in Southeast Asia in response to the investigation. He also invoked the Defense Production Act to boost the manufacturing of solar panels and other clean energy sources in the United States. In this way, domestic production could be expedited without interfering with the DOC investigation.
The DOC said today that Biden’s presidential proclamation gives U.S. solar importers “ample time to adjust supply chains and ensure supplies are not coming from companies that are breaking U.S. law.”
But Abigail Ross Hopper, president and CEO of the Solar Energy Industries Association (SEIA), didn’t see it that way. She said in a statement:
The only good news here is that the Commerce Department did not target all imports from the subject countries. Nonetheless, this move will lock in billions of dollars of US clean energy investment and result in a significant loss of well-paying US clean energy jobs. While President Biden was wise to provide a two-year window before tariffs are implemented, that window is closing fast, and two years is simply not enough time to establish manufacturing supply chains that will meet US solar demand.
This is an error that we will have to deal with over the next few years.
George Hershman, CEO of SOLV Energy, the largest utility-scale solar installer in the United States, was also unhappy with the DOC’s announcement. He said in an emailed statement:
After years of supply chain challenges and trade disruptions, I remain concerned that the Commerce Department has chosen a path that could jeopardize the solar industry’s ability to hire more workers and build the clean energy projects needed to meet our nation’s climate goals.
The upside is that the Commerce Department has taken a nuanced approach to exempting a number of manufacturers rather than issuing a blanket ban on all products from the targeted countries. While it is positive that companies will be able to access some of the crucial materials we need to deploy clean energy, it is nonetheless true that this move will further tighten a struggling supply chain and undermine our ability to fulfill the promise of the Inflation Reduction Act.
Photo: Tom Fisk on Pexels.com
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