Department Of Commerce Decision Puts Fate Of U.S. Solar Industry In Jeopardy
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George L. Strobel II is Partner, Co-Founder & Co-CEO of Monarch Private Capital.

On March 28, in a decision that would put the U.S. solar industry on hold, the U.S. Department of Commerce initiated an anti-dumping investigation into imports of solar cells and modules from Cambodia, Malaysia, Thailand and Vietnam in response to a petition from a small California solar panel manufacturer, Auxin Solar. The investigation could result in tariffs of up to 250% on imports from these four countries, which account for more than 80% of all U.S. solar module imports. These tariffs could cripple solar deployment, threaten tens of thousands of U.S. jobs and make it virtually impossible for the Biden administration to meet its climate goals.

Auxin Solar claims that more tariffs would boost domestic manufacturing, but with very limited commercial production capacity currently in the United States, it is unlikely that domestic producers could meet growing demand. Drastic, short-term measures like these typically only create uncertainty in the market as opposed to meaningful legislative efforts that could incentivize U.S. production, such as domestic-based manufacturing tax credits. Based on what is known about the potential side effects of losing solar imports, the petition is nothing short of an unwitting attempt to promote the interests of Auxin Solar at the detriment of the U.S. solar industry, its workers and its transition to a clean energy economy.

According to SEIA, new tariffs would result in an annual loss of 16 GW of new solar installations, a figure representing two-thirds of all solar panels the U.S. installed in 2021. An estimated 70,000 U.S. solar jobs would be lost, electricity costs would rise and U.S. carbon emissions would increase by a disastrous 61 million metric tons over the next four years. Of greater significance, this decision by the U.S. Department of Commerce (DOC) will cause the U.S., and indirectly the rest of the world, to be more dependent on Russian and Middle Eastern oil to fuel growth in energy consumption.

Bringing the manufacturing of solar cells and panels to the U.S. is a major task and will take years to establish. Moreover, the devastation brought on by the proposed tariffs would reduce the domestic customer base for prospective domestic manufacturers, and as an experienced workforce leaves the industry, U.S. solar growth could come to a grinding halt.

This is not the first time the Biden administration has proposed policies detrimental to the U.S. solar industry. The 15% global minimum tax championed by Treasury Secretary Yellen has also caused financial investors to reevaluate their appetite for investing in renewable energy projects. The Biden administration needs to support the president and start implementing policies that encourage investment in renewable energy rather than constrict it.

The DOC’s current investigation directly refutes the Biden administration’s clean energy plans, thwarting U.S. efforts to reach its goal of 25 GW of onshore renewable energy capacity by 2025. The looming imposition of new solar tariffs severely impacts private investment and threatens tens of thousands of U.S. solar jobs. The Department of Commerce must bring an immediate end to this baseless investigation in order to create a sustainable, clean-power future for the nation.


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