Sign In or Create an Account.

By continuing, you agree to the Terms of Service and acknowledge our Privacy Policy

Economy

American Solar Is in a Trade War With Itself

Manufacturers and installers have different opinions on tariffs.

A solar panel worker.
Heatmap Illustration/Getty Images

The American solar industry is in a tizzy over tariffs. On one side are the companies that develop, finance, and install solar systems. On the other, the American (or American-located) companies that manufacture them.

China’s solar panel industry has been a combination of boon and bugaboo for American renewable energy efforts for years. On the one hand, the solar development sector has benefitted from the cheap panels they have happily put up on roofs and in fields across the country, underpinning the massive growth of solar power in the past decade.

And then on the other there’s the still-nascent American solar manufacturing industry (and a South Korean company with a substantial facility in Georgia), which joined together to file petitions with the Department of Commerce and the U.S. International Trade Commission Wednesday, beseeching them to investigate what it argues are violations of trade laws by Chinese-owned solar panel manufacturers in Southeast Asia.

The group claims that China’s 80% market share in solar products is a “near monopoly” underpinned by “unfair trade practices,” including subsidies and selling at below-cost. About two-thirds of installed solar panels come from overseas, the group claims, “with the majority arriving without safeguard measures or tariffs from China via Malaysia, Vietnam, Cambodia, and Thailand.” The Southeast Asian imports the petition targets are worth some $12 billion annually.

“America’s solar manufacturing industry is on the cusp of tremendous growth that will create jobs and change the trajectory of our clean energy transition for decades to come,” Tim Brightbill, a lawyer representing the group, said in a release. “However, this manufacturing renaissance is being threatened by China’s industrial policy, which has led to massive subsidization in China and Southeast Asia.”

The solar manufacturers’ petition comes as a two-year moratorium on tariffs against Chinese solar panels is due to expire next month. Solar developers had been lobbying the White House to boost other kinds of support for American solar manufacturing, hoping to head off any push for new tariffs, Bloomberg reported. But according to Reuters, the administration is inclined to take the protectionist side.

“Reducing reliance on Chinese clean energy imports, such as solar panels, is among the most bipartisan issues within clean energy,” Morningstar analyst Brett Castelli wrote in a note. For Republicans, China‘s solar dominance represents yet another strategic asset controlled by an adversary state. For Democrats, they are choking off a burgeoning American manufacturing sector.

And yet the question is not as simple as support U.S. solar or don’t. The likely “tightening of solar panel imports into the U.S. would benefit First Solar,” an American solar manufacturer that’s part of the petitioning group, Castelli wrote, “while being a net negative for the rest of our solar sector coverage.”

The Biden administration has long put itself squarely behind American solar. The Inflation Reduction Act’s advanced manufacturing production credit subsidizes domestic renewable energy manufacturing in the United States, while Treasury Secretary Janet Yellen has criticized Chinese “overcapacity” in renewable energy technology. On the installer side, there are tax credits and subsidy programs to make solar more affordable to individuals.

While the solar manufacturers certainly are not unhappy with their tax credits, they see action on trade as an existential issue.

“Everyone knows these Chinese-headquartered companies in Southeast Asia are benefiting from subsidies and exporting below-cost solar into the U.S. market, harming American solar manufacturers and their workers,” Mike Carr, the executive director of the Solar Energy Manufacturers for America Coalition, said in a statement. “Conditions are untenable for American solar manufacturers.”

Other renewable energy trade groups — The American Council on Renewable Energy, the American Clean Power Association, and Advanced Energy United — call tariffs a threat to clean energy deployment. The manufacturers’ petition “creates market uncertainty in the U.S. solar industry and poses a potential threat to the build-out of a domestic solar supply chain,” the groups said in a statement, which also noting that they support a “strong domestic solar supply chain,” and specifically the tax credits that encourage onshore production of solar panels.

But while trade groups lament the stoking of trade war to anyone who will listen, companies — or at least one very big company — is telling its investors that things are going to be OK.

NextEra, one of the country’s largest renewable energy developers and operators, has been telling investors and analysts that the petitions and potential tariffs would not be a big deal.

“We expect that any trade actions that would occur this time around will be very manageable,” NextEra CEO John Ketchum said on the company’s quarterly earnings call Tuesday. The company didn’t expect any potential trade restriction “to result in delivery stoppages,” he added, and since NextEra orders panels well before actual construction on a project commences, that “gives us a lot of time and opportunity to be able to troubleshoot any issues should they arise,” Ketchum said.

Finally, even if there were new tariffs, the gap in cost between domestic and overseas panels – the exact thing that the solar manufacturers and the Biden administration lament — is so large that “there’s a lot of economic reasons for deliveries to continue to occur.” Even a 15% tariff on Chinese solar panels, Ketchum said, would be “quite manageable.”

While everyone says they want an American solar manufacturing industry to succeed, trade protection and tax credits can only go so far.

You’re out of free articles.

Subscribe today to experience Heatmap’s expert analysis 
of climate change, clean energy, and sustainability.
To continue reading
Create a free account or sign in to unlock more free articles.
or
Please enter an email address
By continuing, you agree to the Terms of Service and acknowledge our Privacy Policy
Energy

The New Campaign to Save Renewables: Lower Electricity Bills

Defenders of the Inflation Reduction Act have hit on what they hope will be a persuasive argument for why it should stay.

A leaf and a quarter.
Heatmap Illustration/Getty Images

With the fate of the Inflation Reduction Act and its tax credits for building and producing clean energy hanging in the balance, the law’s supporters have increasingly turned to dollars-and-cents arguments in favor of its preservation. Since the election, industry and research groups have put out a handful of reports making the broad argument that in addition to higher greenhouse gas emissions, taking away these tax credits would mean higher electricity bills.

The American Clean Power Association put out a report in December, authored by the consulting firm ICF, arguing that “energy tax credits will drive $1.9 trillion in growth, creating 13.7 million jobs and delivering 4x return on investment.”

Keep reading...Show less
Green
Politics

AM Briefing: A Letter from EPA Staff

On environmental justice grants, melting glaciers, and Amazon’s carbon credits

EPA Workers Wrote an Anonymous Letter to America
Heatmap Illustration/Getty Images

Current conditions: Severe thunderstorms are expected across the Mississippi Valley this weekend • Storm Martinho pushed Portugal’s wind power generation to “historic maximums” • It’s 62 degrees Fahrenheit, cloudy, and very quiet at Heathrow Airport outside London, where a large fire at an electricity substation forced the international travel hub to close.

THE TOP FIVE

1. Trump issues executive order to expand critical mineral output

President Trump invoked emergency powers Thursday to expand production of critical minerals and reduce the nation’s reliance on other countries. The executive order relies on the Defense Production Act, which “grants the president powers to ensure the nation’s defense by expanding and expediting the supply of materials and services from the domestic industrial base.”

Keep reading...Show less
Yellow
Electric Vehicles

These States Are Still Pushing Public EV Charging Programs

If you live in Illinois or Massachusetts, you may yet get your robust electric vehicle infrastructure.

EV charging.
Heatmap Illustration/Getty Images

Robust incentive programs to build out electric vehicle charging stations are alive and well — in Illinois, at least. ComEd, a utility provider for the Chicago area, is pushing forward with $100 million worth of rebates to spur the installation of EV chargers in homes, businesses, and public locations around the Windy City. The program follows up a similar $87 million investment a year ago.

Federal dollars, once the most visible source of financial incentives for EVs and EV infrastructure, are critically endangered. Automakers and EV shoppers fear the Trump administration will attack tax credits for purchasing or leasing EVs. Executive orders have already suspended the $5 billion National Electric Vehicle Infrastructure Formula Program, a.k.a. NEVI, which was set up to funnel money to states to build chargers along heavily trafficked corridors. With federal support frozen, it’s increasingly up to the automakers, utilities, and the states — the ones with EV-friendly regimes, at least — to pick up the slack.

Keep reading...Show less
Green