The US Department of Commerce (DOC) has determined that four out of eight Chinese solar companies it has investigated are “attempting to circumvent US duties by doing minor processing in one of the Southeast Asian countries before shipping to the US”. Here’s what it means for the U.S. solar industry.
Update December 5: One of the four solar companies, Vina Solar, is owned by Xi’An-headquartered LONGi Green Energy Technology, the largest solar manufacturing company in the world.
LONGi said today it would provide evidence to the DOC that Vina complies with US laws. The solar giant said in a statement to Reuters:
Subsequently, the US Department of Commerce will conduct an on-site audit over the next few months to verify the authenticity of the investigative information. During this period, we will actively provide evidence that we are in compliance with US trade law and are not circumventing it.
Electrek will continue to monitor this story.
The DOC found that the four Chinese companies that attempted to circumvent US duties by processing in Southeast Asia are:
- BYD Hong Kong, in Cambodia
- Canadian Solar, in Thailand
- Trina, in Thailand
- Vina Solar, in Vietnam
The DOC findings are preliminary, and the agency will conduct in-person audits in the coming months. 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 confirm that they are not circumventing [antidumping duty (AD) and countervailing duty (CVD) orders]in which case the circumvention findings will not apply.
DOC also notes:
Some companies in Malaysia, Thailand and Vietnam also did not respond to Commerce’s request for information in this investigation and, in accordance with long-standing practice, will be found to be circumventing.
As Electrek reported in mid-May, the DOC launched an investigation into whether Southeast Asian solar manufacturers are using parts made in China that would normally be subject to a tariff.
This investigation destabilized the US solar industry, which relies on imports of solar modules to meet growing demand. The majority of the US solar industry then argued that the DOC investigation would harm the US solar industry and wanted the investigation dismissed.
On June 6, President Joe Biden waived tariffs for 24 months on solar panels made in Southeast Asia in response to the investigation. He also invoked the Defense Production Act to spur US solar panel and other clean energy production. In that way, domestic production could be increased without interfering with the DOC investigation.
The DOC claimed today that Biden’s presidential announcement gives US solar importers “sufficient time to adjust supply chains and ensure that purchases are not made from companies found to be in violation of US 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 Commerce did not target all imports from the countries in question. Nonetheless, this decision will strand billions of dollars in American clean energy investments and result in significant losses of good-paying American clean energy jobs. While President Biden was wise to provide a two-year window before tariff implementation, that window is closing quickly, and two years is simply not enough time to establish production chains that will meet America’s demand for solar energy.
This is a mistake we have to deal with in the coming years.
George Hershman, CEO of SOLV Energy, America’s largest utility-scale solar installer, was also not happy with the DOC’s announcement. He said in an email:
After years of supply chain challenges and trade disruptions, I remain concerned that the Commerce Department chose a path that could jeopardize the solar industry’s ability to hire more workers and build the clean energy projects needed to meet the nation’s climate goals.
The upside is that Commerce took 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 critical materials we need to deploy clean energy, it remains true that this ruling will further constrain a challenged supply chain and undermine our ability to fulfill the promise of the Inflation Reduction Act.
Photo: Tom Fisk on Pexels.com
UnderstandSolar is a free service that connects you with top-rated solar installers in your region for personalized solar estimates. Tesla now offers price matching, so it’s important to shop around for the best deals. Click here to learn more and get a quote. — *ad.
FTC: We use monetized auto affiliate links. More.