In news that could jump-start the American solar industry, mired for months in a U.S. Commerce Department investigation, the Biden Administration announced Monday that it will waive tariffs for solar panel imports from four Asian countries over the next two years.
The countries are Cambodia, Malaysia, Thailand and Vietnam. Both solar and environmental groups welcomed the move.
“We applaud President Biden’s thoughtful approach to addressing the current crisis of the paralyzed solar supply chain,” said Abigail Ross Hopper, president and CEO of the Solar Energy Industries Association, in a statement. “Today’s actions protect existing solar jobs, will lead to increased employment in the solar industry and foster a robust solar manufacturing base here at home.”
Auxin Solar, a small California-based solar company, triggered the Commerce probe when it claimed that panels from Cambodia, Malaysia, Thailand and Vietnam were actually from Chinese manufacturers trying to bypass U.S. tariffs. Companies have been worried that they may have to pay retroactive tariffs on panels from those four countries, leading to hesitation in investment.
Lawmakers and advocates have said the claims have no merit and threaten to create critical delays in the U.S. solar industry. A recent report said that as many as two-thirds of U.S. solar projects were affected by the investigation. Because of the industry-wide delays, some planned shutdowns of coal plants have had to be pushed back. Monday’s announcement is designed to boost the solar industry, which is crucial to climate adaptation efforts and the energy transition.
The tariff decision was also part of a larger announcement that authorizes the Defense Production Act , known as the DPA, to increase U.S. production of clean energy technology like heat pumps. The latter, heating and cooling systems that have been dogged by misconceptions about their effectiveness in cold climates, are extremely energy efficient and could be an important climate solution.
The announcement also authorizes the DPA to produce solar panel parts, building insulation, equipment for making and using clean electricity-generated fuels, and power grid infrastructure like transformers. “With the new DPA authority, DOE can help strengthen domestic solar, heat pump and grid manufacturing industries while fortifying America’s economic security and creating good-paying jobs, and lowering utility costs along the way,” said U.S. Secretary of Energy Jennifer M. Granholm in a statement.
The Biden administration announcement also highlighted the national security benefits of the plan, saying that increasing domestic production will reduce dependence on foreign oil and gas, especially from Russia and other areas of conflict. “Reducing America’s dependence on gas and oil is critical to U.S. national security,” said Deputy Secretary of Defense Dr. Kathleen Hicks.
Even as the move marks an important step towards clean energy, Democrats’ climate agenda, including the Build Back Better Act, remains in jeopardy. But despite the challenges, many advocates see Monday’s announcement as a step in the right direction. “President Biden’s action will restore certainty to the solar market and speed our transition to clean energy,” said Martin Hayden, Vice President of Policy and Legislation at Earthjustice, in a statement. “We applaud the President’s inclusion of heat pumps in the use of the Defense Production Act as a significant leap forward to supply American homes with a cleaner, more affordable source of heating and cooling.”