Biden takes emergency route to boost US solar energy production
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The Biden administration will take emergency measures to increase the USA's domestic production of solar panels and enforce a two-year tariff exemption on South Asian imports of the technology.
The United States is committed to becoming a solar energy superpower as its president, Joe Biden, looks at ways to jumpstart progress toward his climate change-fighting goals.
In order to boost the country's renewable energy production, Biden has announced his intention to use his executive powers to accelerate the domestic manufacturing of solar panels and issue a 24-month tariff exemption on imports of the products from several Asian countries. Advancements in the manufacturing of this technology froze last March, after the Commerce Department launched an inquiry into possible trade violations involving Chinese products.
The investigation halted the flow of solar panels that make up more than half of US supplies and 80 per cent of imports.
The Commerce Department is still scrutinising imports of solar panels from Thailand, Vietnam, Malaysia and Cambodia, concerned that products from those countries are circumventing the tariffs imposed on goods made in China. The investigation could take at least three more months to complete.
The White House said Biden will invoke the Defense Production Act (DPA) to allow the Department of Energy to "rapidly expand" US manufacturing of solar panel parts, power grid infrastructure such as transformers, heat pumps, building insulation and other equipment, despite the probe.
“President Biden has invoked the Defense Production Act so that the US can take ownership of its clean energy independence,” energy secretary Jennifer Granholm said in a statement. “For too long the nation’s clean energy supply chain has been over-reliant on foreign sources and adversarial nations."
Clean energy leaders have long warned that the Commerce Department investigation — which could result in retroactive tariffs of up to 240 per cent — would severely hinder the US solar industry, leading to thousands of layoffs. Such a measure would have also significantly jeopardised one of Biden's top clean-energy goals and run counter to his administration's push for renewable energy.
The announcement has caused solar energy companies to gain ground on Wall Street, as concerns regarding the risk of being forced to hold billions of dollars in reserves to pay potential tariffs have been assuaged.
"The president's announcement will rejuvenate the construction and domestic manufacturing of solar power by restoring predictability and business certainty that the Department of Commerce's flawed inquiry has disrupted," Heather Zichal, CEO of the American Clean Power Association said.
Other officials called the decision a needed "bridge measure" that can be used while other efforts increase domestic solar power production, denying concerns that it might be perceived as a "gift to China."
The Biden administration has reassured the public of its commitment towards ensuring that US trade laws are followed and its support for the Commerce Department investigation.
"The president's emergency declaration ensures America's families have access to reliable and clean electricity while also ensuring we have the ability to hold our trading partners accountable to their commitments," said Commerce Department secretary Gina Raimondo. Last May, she stressed that the solar inquiry is following a process that doesn't allow consideration of climate change, supply chains or other factors.
"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," said Abigail Ross Hopper, president and CEO of the Solar Energy Industries Association.
But not everyone in the industry was supportive.
"The administration cannot stick a Band-Aid on the issue and hope that it goes away," said Samantha Sloan, vice-president of policy for solar panel manufacturer First Solar. The company considers using the DPA as a measure that "falls short of a durable solar industrial policy."
The use of executive action comes as the Biden administration's clean energy tax cuts, and other major proposals meant to encourage domestic green energy production, have stalled in Congress.
The DPA is a tool that allows the federal government direct manufacturing production, which has often been used by different administration to palliate crises. The Trump administration made use of it to produce medical equipment during the coronavirus pandemic and Biden has previously invoked it to tackle the shortage of infant formula, ramp up domestic output of key minerals for electric vehicle batteries, and boost COVID-19 tests and vaccine production.
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