- Solar cells and modules from Cambodia, Malaysia, Thailand, and Vietnam can be imported into the US without any tariffs for next 2 years, the US government has ruled
- It will ensure the industry has access to modules to speed up clean energy deployment while giving time to local manufacturing to catch up with increasing demand
- Government will also become a significant procurer of domestically manufactured solar modules thus creating a local market
US President Joe Biden turned the proverbial savior for the country’s solar industry after he used his executive powers to offer a 24-month reprieve for imported solar components to enter US borders without tariffs, to ensure a reliable supply till the country speeds up its local manufacturing.
Specifically, the White House stated that the President is, “Temporarily facilitating US solar deployers’ ability to source solar modules and cells from Cambodia, Malaysia, Thailand, and Vietnam by providing that those components can be imported free of certain duties for 24 months in order to ensure the US has access to a sufficient supply of solar modules to meet electricity generation needs while domestic manufacturing scales up.”
The US solar industry had been up in arms lobbying strongly against, and some quarters in favor of, the Department of Commerce investigation into Auxin Solar’s petition to impose tariffs on solar panel imports from the above mentioned 4 Southeast Asian nations that supply as much as 80% of US module demand. Analysts warned solar installations to drop significantly as module supply started drying up pending the investigation (see US Could End Up With 10.07 GW AC Solar In 2022).
Now, the US action gives certainty to continued module supply putting the industry back on track. “This welcome development follows months of needless disruption to one of the country’s fastest-growing sources of new jobs and best defenses against the threat of climate change,” said the President and CEO of the American Council on Renewable Energy (ACORE).
In addition, the administration has authorized the use of Defense Production Act (DPA) to accelerate domestic production of clean energy technology, including components for solar panels, as it targets to grow it to 22.5 GW by 2024, up from 7.5 GW at present. To ensure this thrust on Made in America clean energy and increase demand for such products in the domestic market, the government has directed the development of 2 ‘innovative tools’.
One of these is the Master Supply Agreements for domestically manufacturing solar systems to be sold to the US government, and Super Preferences to apply domestic content standards for federal procurement of solar systems, including domestically manufactured solar PV components.
“These federal procurement measures can stimulate demand for up to a GW of domestically produced solar modules in the near term, and up to 10 GW over the next decade from US government demand alone,” stated the White House. “To further increase the impact of these actions, the Administration will also partner with state and local governments and municipal utilities in these innovative arrangements – increasing the potential market impact over the next decade to as much as over 100 GW.”
The President and CEO of Solar Energy Industries Association (SEIA), Abigail Ross Hopper welcomed the decision that will allow the solar industry to ‘return to rapid deployment’.
“While the Department of Commerce investigation will continue as required by statute, and we remain confident that a review of the facts will result in a negative determination, the president’s action is a much-needed reprieve from this industry-crushing probe,” added Hopper.
This executive move by the US President shows solar is one among top priority industries for the current administration. One can also safely presume and hope that within these 24 months, the US will install a record high solar aligned with the national goal to decarbonize its electricity supply by 2035.