A newly formed coalition of solar companies is warning that "exploitative" Chinese trade practices could endanger U.S. clean energy goals, raising alarm bells among industry advocates even as the Biden administration has pledged to boost solar power.
On Monday, a group of solar manufacturers known as the American Solar Manufacturers Against Chinese Circumvention (A-SMACC) asked the Biden administration to slap fresh tariffs on Chinese-linked solar imports routed through three Southeast Asian countries.
In petitions filed with the Department of Commerce, the coalition alleged that Chinese companies have been setting up shop in Malaysia, Vietnam and Thailand to avoid paying U.S. tariffs. It said allowing the practice to continue would cede "monopoly control" of the industry to China, leaving the administration’s zero-carbon electricity goals "gravely imperiled."
The petitions were backed by at least three companies, although the group declined to identify its members. The names were redacted in copies of the petitions made available to E&E News, and in those filings, the coalition cited the threat of "retribution" if their members’ identities were disclosed.
The solar industry’s chief trade group, the Solar Energy Industries Association, promised to fight the petitions, which it said came from four companies.
In a note to members yesterday, SEIA’s president and CEO, Abigail Ross Hopper, said that her group would "aggressively contest" the coalition’s bid for a quick and favorable decision from Commerce on new tariffs. "While we are still assessing the potential impact of these petitions, the disruption to the U.S. solar market could be severe," added Hopper.
Some 20 Chinese solar companies and subsidiaries, including several of the world’s largest suppliers like JinkoSolar Holding Co. Ltd. and LONGi Solar, were called out in the A-SMACC petitions.
Those companies had made only "the bare minimum investment" in their Southeast Asian facilities, the petitions alleged. Solar cells were sent to those facilities from China to undergo "minor processing" before being exported to the U.S. — with the real goal of avoiding American trade policies aimed at China, A-SMACC wrote.
A JinkoSolar spokesperson declined comment, and several other Chinese companies did not respond to questions from E&E News.
A-SMACC wants Commerce to expand anti-dumping tariffs on Chinese-made solar panels and cells — first enacted under former President Obama in 2012 — to encompass panels and cells made in the three Southeast Asian countries as well.
The exact tariff percentage can vary widely, but last year, Chinese-origin solar cells made by many large suppliers were facing tariffs of close to 100%.
Since the Obama administration tariffs took effect, direct imports of China’s most common type of solar cells and panel have plummeted, from $2.8 billion in 2011 to $392 million in 2020, according to federal trade officials. Meanwhile, imports from Malaysia, Thailand and Vietnam have skyrocketed.
A-SMACC is asking Commerce to reach a preliminary decision within 45 days, which would put the tariffs in place while officials contemplated their final ruling.
"This is consistent with the Biden administration’s goals," said Timothy Brightbill, counsel for A-SMACC and a partner at D.C. law firm Wiley Rein LLP. "Let’s bring the supply chain back, and let’s ensure that the next generation of solar technology is made here in the United States."
A separate war over another type of solar tariffs, enacted by former President Trump on panels and panel parts in 2018, is also heating up in the energy policy world.
Earlier this month, two U.S.-based solar manufacturers asked trade officials to prolong Trump’s 18% duties another four years and remove loopholes, arguing the measures are needed to protect the budding field of manufacturers from foreign competition. SEIA’s representatives countered that the two companies — California-based panel producer Auxin Solar Inc. and Georgia-based Suniva Inc. — were "looking for excuses" for their lack of success and urged the Biden administration to end the "job-killing" tariffs (Energywire, Aug. 3).
Solar’s forced labor issue
Hopper’s note also revealed that U.S. border agents had detained solar products due to their association with forced labor in China — a threat that has hung over the solar industry for the better part of a year.
It appeared to be the first time that Customs and Border Protection (CBP) has taken that step against a solar company since the Biden administration banned imports of silica — a common material in solar panels — from several Chinese companies in June.
The administration linked the material to forced-labor programs in China’s Xinjiang province, where the State Department and many Western governments say that genocide is occurring against the Uyghur ethnic group (Energywire, April 15).
The CBP action affected "a significant portion of at least one major supplier’s imports", wrote Hopper in her note to members — likely because CBP officials believed the products contained Xinjiang-linked silica materials.
Since last fall, she wrote, SEIA has been urging its members to disconnect from Xinjiang and helping develop a due-diligence protocol for U.S. solar companies to make sure their supplies don’t use forced labor.
But the industry group has also cautioned the Biden administration not to use forced-labor sanctions as a "blunt instrument" against solar companies, according to Hopper.
SEIA is pushing an "alternative solution to broad enforcement action" that would also lower supply chains’ exposure to forced labor, she said. "We are in the process of presenting this solution to the U.S. government at the highest level," Hopper added.
"No doubt these are difficult times for our industry," wrote Hopper. "The disruptive and harmful impact of new trade petitions and CBP enforcement action cannot be understated."
Bringing it home?
News of the solar industry’s turmoil emerged as the Energy Department championed the Biden administration’s plans for buoying the energy resource — including a homegrown manufacturing sector.
An upcoming analysis from the National Renewable Energy Laboratory will show that solar deployment needs to triple or quadruple over the decade in order for the U.S. power sector to eliminate most of its CO2 emissions by 2035, DOE said in a new issue brief.
Solar could go from 3% of the electricity generation today to over 40% in 2035, if the grid is mostly decarbonized by then, the forthcoming NREL analysis found.
That explosion of growth would depend on several types of investments, DOE noted, including new tax credits for solar generation, storage and transmission, as well as new financing for lower-income residents.
Manufacturing of innovative solar technologies would need to grow as well, at least in part due to concerns about the use of forced labor in China’s supply chains, according to DOE.
That was a sentiment that the SEIA and A-SMACC appeared to agree on, although they have conflicting ideas about how the federal government should act.
"These persistent challenges with the global supply chain further underscore the importance of strengthening our domestic solar manufacturing capacity here in the United States," wrote Hopper.
And Brightbill, A-SMACC’s counsel, noted recent announcements of solar plant expansions in the U.S.
"There are companies that want to build new factories and make the next generation of solar technology here in the U.S.," he said. The coalition’s petitions, he added, "should help."