US solar development is essentially frozen while the Commerce Department decides on proposed tariffs that could spike module costs up to 250% and prevent domestic clean energy goals from being reached, the president of a top solar contractor says.
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The proposed tariffs on solar cells and panels come at a time when the solar industry, like many others, has been hit hard by supply chain issues, including shipping delays, increased shipping costs, and increase aluminum and steel costs, George Hershman of San Diego-based Swinerton Renewable Energy, said in a recent interview.
"If this action were to move forward then clearly we would not be able to meet those goals," Hershman said about derailing the Biden administration's goal to decarbonize the US electricity sector and the Solar Energy Industries Association's goal of 30% US solar share by 2030.
Commerce's weighing of the tariffs on modules manufactured in Malaysia, Vietnam and Thailand comes after four companies anonymously filed tariff circumvention petitions Aug. 16, asking it to impose duties of 50%-250% on such products from those countries by Sept. 30.
Malaysia, Vietnam and Thailand together account for 80% of solar modules imported into the US. This has created significant uncertainty because US companies cannot absorb that much cost supply risk and has already halted development or delayed projects across the country, Hershman said.
"There's a lot of cash pressure in the industry on the opportunity to deliver in a hugely optimistic time for solar," he said.
Solar generation was projected to outpace wind new-builds this year given the Biden administration's focus on advancing clean energy and technology cost declines.
But compounded with supply chain issues, the industry has stalled, Hershman said. Speaking about the petitioners to Commerce, he added they "clearly don't support the industry growth and are willing to disrupt it this much."
SEIA raps Commerce inaction
Solar Energy Industries Association and other solar industry executives say the petitions against the imports have no merit and should be dismissed. Commerce instead has yet made no decision and requested more information from the petitions, including their identities.
"We are disappointed that Commerce did not dismiss these meritless petitions outright," SEIA President and CEO Abigail Ross Hopper said in a Sept. 29 statement. "However, the detail and nature of the questions Commerce asked the anonymous petitioners clearly indicates that the petitioners have produced a filing largely devoid of the information the department needs to assess whether to initiate this case. We believe that when and if the petitioners amend their original submission, it will become abundantly clear that they have no case for circumvention."
The US relies on a global economy, but tax policy and programs are needed to build up domestic manufacturing and the supply chain, Hershman said about why he supports the Solar Energy Manufacturing for America, which would provide tax credits for US manufacturers.
"There's a number of products that go into solar manufacturing," Hershman said. "None of us can afford to lose the years it'll take to get [US manufacturing] structure in place. We have to import while we build up our manufacturing in the US. We just can't wait to get there."
However, one area to focus on is steel manufacturing, because the US already has the infrastructure and could produce steel racking systems used in solar modules, Hershman said.
"There are things we can build here quickly and put in place," he said.
It would take two to three years to build a complete solar manufacturing infrastructure in the US, but steel racking system manufacturing would be up and running in a few months, Hershman said.
While manufacturing would create hundreds of jobs in the US, the largest job creator would be solar installations, where 5,000 people can be hired, Hershman said, citing design, engineering and other work involved in installations.
Delaying projects because of lack of module supply means "real job loss," Hershman said. "We want highly trained and highly motived employees in this industry."