US solar companies demand crackdown on cheap imports amid price collapse

Several of the largest U.S. solar manufacturing companies are demanding aggressive action against cheap imports, arguing in a petition filed Wednesday with the Commerce Department that companies from four Asian countries are illegally flooding the U.S. market with Chinese-subsidized panels .

Although the panels are not produced in China, the petitioners claim that many of them are made in factories linked to China-based companies that benefit from massive price support.

The complaint comes amid a glut of solar panels on the global market that has driven prices down 50 percent over the past year, with the International Energy Agency predicting an even bigger drop in prices. Manufacturers currently make two solar panels for every panel installed, according to the IEA. The oversupply is jeopardizing a boom in U.S. manufacturing driven by the climate bill signed by President Biden, the Inflation Reduction Act.

We seek to enforce the rules, address the damage to our domestic solar industry and signal that the United States will not be a dumping ground for foreign solar products, said Tim Brightbill, attorney for the Alliance Trade Committee. American solar manufacturing group. American companies that filed the request. The group includes industry giants such as Ohio-based First Solar and Qcells, which used Inflation Reduction Act grants to invest in huge new manufacturing facilities in Georgia.

But the petition reignites tensions in the U.S. solar industry, as panel installers and developers of large solar farms warn that imposing restrictions on imports could hurt consumers and raise prices. If the petitioners succeed, companies that purchase solar panels from companies in any of the four countries cited could be subject to heavy penalties, which federal trade officials could apply retroactively.

The industry only recently emerged from a bitter battle over enforcement of trade laws, after the administration discovered that Chinese companies were illegally circumventing them by producing panels in China and then finishing assembly in other countries to avoid customs duties.

After industry groups warned that strict enforcement of these trade laws could cripple growth, the administration agreed to waive sanctions for two years. Enforcement is expected to resume in June. Today, American manufacturers say Chinese companies have changed their strategy and built factories in Cambodia, Malaysia, Vietnam and Thailand, thanks to large subsidies from a Chinese government eager to maintain its dominance over the global solar energy market. These four countries accounted for 84% of solar panels imported into the United States during the last quarter of 2023, according to the petitioners.

Their petition was immediately opposed by major clean energy groups in the United States, which represent all companies in the sector, not just manufacturers.

Today's filing creates market uncertainty for the U.S. solar industry and poses a potential threat to the development of a domestic solar supply chain, says a statement from a coalition that includes Solar Energy Industries Association and the American Clean Power Association.

America's clean energy industry urges the Biden Administration to consider alternative solutions to address petitioners' concerns so we can support American manufacturers and maintain a thriving clean energy economy throughout the value chain . The groups warn that market disruptions could undermine the administration's climate goals.

The stock of solar panels stored in US warehouses is so large that it could meet a year and a half of demand, according to the IEA. The manufacturing companies that filed the petition say U.S. panel imports last year outpaced installations by more than 25 gigawatts, the amount of power produced by 25 large nuclear power plants.

The glut comes after billions of dollars in new U.S. tax incentives sparked a boom in solar production there. The incentives were intended to move solar production away from China and back to the United States. They led to the construction of new factories and a resurgence in solar cell production, a key part of the industry that had been almost entirely ceded to China and other countries.

But the solar market is also experiencing growing difficulties, unrelated to geopolitics. California's rooftop solar installations have collapsed after the state passed new rules reducing subsidies for homeowners who generate electricity with these installations. The change came amid concerns that low-income taxpayers, who couldn't afford solar panels, were shouldering too much of the cost of rooftop installations.

At a Senate hearing last month, Mark Widmar, CEO of First Solar, one of the companies that signed the petition filed Wednesday, warned lawmakers that the U.S. solar manufacturing industry remained in a precarious position, despite the adoption of the IRA.

Market conditions show no signs of slowing imports to the United States, barring changes in trade policy and enforcement, he said. China's relentless subsidy and dumping strategy has caused a significant collapse in cell and module prices and threatens the viability of many manufacturers who may never be able to take off or have the capacity to finance startup. or the growth of their business. operations.

Earlier this year, a company called CubicPV, which had the backing of Bill Gates, abandoned plans to build a factory that would make solar wafers a key part of panels, citing rapidly falling prices in the market.

The Commerce Department must now decide within 20 days whether to launch the trade investigation requested in the petition, consistent with U.S. trade rules. If an investigation were to take place, it would be a lengthy process, according to the groups that filed the petition, likely stretching into 2025 before reaching a full resolution. But the administration would be required to make a preliminary decision in the coming months on whether trade rules were likely to have been violated and whether U.S. businesses had been harmed.

As the case progresses, tensions within the U.S. solar industry are likely to increase.

The case is bad news for clean energy jobs and U.S. solar manufacturing, Kevin G. Hostetler, CEO of Array Technologies, which provides solar farm developers and operators with systems that track and maximize the effectiveness of their panels. Raising tariffs will only cause uncertainty and unnecessary project delays, preventing the United States from meeting its clean energy deployment and manufacturing goals.

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