Pennsylvania solar companies are relieved by a decision by the Biden administration that will spare them unforeseen costs.
The US Department of Commerce is investigating whether China is using four Southeast Asian countries to circumvent tariffs on solar materials. Initially, investigators said the products could be subject to retroactive tariffs if the companies were found to be in violation of US trade policy.
The White House says the vast majority of sunscreen products in the United States are imports. Cambodia, Malaysia, Thailand and Vietnam sent about three-quarters of imported materials in 2020.
Now President Joe Biden is using executive power to to suspend any new tariff on solar products from the four Southeast Asian countries for two years. He also uses the Defense Production Act to try to stimulate domestic manufacturing.
Energy independent solutions near Pittsburgh gets some of its solar materials from Vietnam. Chairman Joe Morinville says the investigation has caused a lot of uncertainty, which has delayed some cases.
“I would have to charge the customer two or three times the amount to recover the risk of that rate, which they won’t pay, and I can’t take the risk,” Morinville said.
He ended up having his supplier in Vietnam sign legal documents certifying that his materials did not come from China.
“It’s not practical for a company to be able to look at a product’s supply chain,” Morinville said. “If you bought a car, you can’t know where every part of that car came from.”
Morinville said the tariff suspension will help the industry. He said his business is now receiving strong demand from residential customers who want to increase their energy security and from commercial customers who are hedging against high energy costs.
But, he added, there must be long-term changes to the tax code to put U.S. solar makers on a level playing field. Morinville said he would like to see the Investment tax credit for a solar installation made permanent.
A major industry trade group hailed Biden’s order.
“The President’s action is a much-needed respite from this industry-crushing probe. During the two-year tariff suspension window, the U.S. solar industry can resume rapid deployment while the Defense Production Act helps expand the American solar manufacturing,” said Abigail Ross Hopper, president of the Solar Energy Industries Association.
SEIA released a report on Tuesday that shows solar installations have slowed in the first three months of this year. He said the industry installed 24% less solar capacity in the first quarter of 2022 compared to the same period in 2021, due to price increases and supply chain constraints.
Biden has set a goal of bringing the country to a 100% carbon-free electric grid by 2035.