Solar

SEIA survey warns of ‘devastating’ solar industry impacts as federal trade probe begins

SEIA survey warns of ‘devastating’ solar industry impacts as federal trade probe begins

Three-quarters of solar companies responding to a Solar Energy Industries Association (SEIA) survey reportedly said that panel deliveries have been cancelled or delayed in the days since the U.S. Commerce Department said in late March that it was opening a circumvention case against imports of solar goods from Cambodia, Malaysia, Thailand and Vietnam.

SEIA said in a press release that more than 90% of the 200 companies that responded to its survey said that the Commerce Department’s actions are having a “severe or devastating impact” on their bottom line. 

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The industry trade group said that all market segments — residential, commercial, community solar, and utility-scale solar — “overwhelmingly reported” devastating or severe impacts from the investigation. Survey respondents included SEIA members and non-members.

SEIA said the Commerce Department investigation could have spillover effects on energy storage projects. It said that most large-scale energy storage projects are paired with solar and warned that without the solar energy components, a project’s energy storage portion could become uneconomical. It said that at a minimum “all project financing agreements” involving storage would need to be renegotiated.

“This investigation is based on a meritless trade case that is hammering the solar industry in real-time and diminishing our efforts as a country to tackle climate change,” said Abigail Ross Hopper, SEIA’s president and CEO, in a statement sent to Renewable Energy World. 

The Commerce Department initiated its investigation on March 25. It said it will look into whether Chinese solar-equipment manufacturers are evading tariffs by sending components to other Asian nations for assembly before shipping finished products to the U.S.

“For years, Chinese solar producers have refused to fairly price their products in the U.S. and have gone to significant lengths to continue undercutting American manufacturers and workers by establishing circumventing operations in countries not covered by those duties,” said Mamun Rashid, CEO of Auxin Solar, which asked Commerce for the investigation. He thanked officials for recognizing the need to investigate what he referred to as “this pervasive backdoor dumping and how it continues to injure American solar producers.”

SEIA said on April 5 that all the domestic manufacturers that responded to its survey said the antidumping case will have a “devastating or severe” effect on their ability to operate. It said that two-thirds reported that as much as 50% of their workforce was at risk. Another one-third said their entire workforce was at risk.

The Commerce Department decision to launch an investigation has placed the Biden administration at odds with a formidable part of the clean energy sector.

Heather Zichal, CEO of the American Clean Power Association, who previously served a climate advisor to President Obama, accused the administration of “empty rhetoric” for allowing the tariff petition to proceed while it also expressed support for the solar industry.

Maggie Clark from the government relations team of utility-scale solar and energy storage developer Pine Gate Renewables called the Biden admin’s tariff investigation “an embarrassment to claims and goals of taking decarbonization seriously.”

And utility-scale developer, 8minute Solar Energy, said it was evaluating potential project delays and job impacts due to the petition, CEO Tom Buttgenbach told Renewable Energy World in late March.

“What we know for certain is that this decision is frankly at odds with the Administration’s efforts to address climate change,” he said.

Both Pine Gate and 8minute are SEIA members.

SEIA said its survey results come at a time when the solar industry is experiencing other supply chain challenges and price increases. SEIA said that in 2021, solar equipment costs rose by 18%. It blamed the threat of previous trade actions for unspecified project delays and cancellations.

A report done on behalf of SEIA by Wood Mackenzie found that the circumvention petitions could eliminate 16 GW of panels from the U.S supply chain, around two-thirds of all the panels the U.S. installed in 2021. SEIA estimated that as a result of the petition, the solar industry could lose 70,000 out of its 231,000 jobs.

Hopper called the countries named in the petition “reliable trading partners,” and said “we need their products” while work is underway to reestablish a manufacturing presence in the U.S.

As solar energy modules came to be viewed as a commodity product over the past decade, U.S. manufacturers largely have been forced to the sidelines by low-cost production, mainly from China.

Lawyers for Auxin Solar said in March that solar cells and module imports are surging ahead of a key Commerce Department decision. They alleged in a filibg that “an enormous volume” of imported solar cells and modules was “surging into the United States” in the days leading up to the Commerce Department decision.

Lawyers cited a recent Commodity Status Report from U.S. Customs and Border Protection that showed imports so far this year totaled 1.8 GW of capacity, including 1.6 GW imported in a single week. The filing said that imports didn’t reach similar levels in 2021 until 38 weeks into the year.

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