Department Of Commerce To Commence Investigation Into Solar Imports

by Peter Maloney
APPA News
March 29, 2022

The U.S. Department of Commerce last week said it would begin an investigation into whether certain photovoltaic solar cells and modules imported from Southeast Asia are circumventing U.S. tariffs.

The March 25 announcement, by James Maeder, deputy assistant secretary for antidumping and countervailing duty operations, was quickly met by criticism and objections, in particular from the Solar Energy Industries Association (SEIA), which said the effect of the tariffs, which could be as high as 250 percent, could “have a devastating impact on the U.S. solar market at a time when solar prices are climbing, and project delays and cancellations are adding up.”

The Department of Commerce memo recommends whether imports of solar cells and/or modules from Cambodia, Malaysia, Thailand, and Vietnam are circumventing the antidumping duty (AD) and countervailing duty (CVD) orders on crystalline silicon photovoltaic cells, whether or not assembled into modules, from the People’s Republic of China.

Tariffs on imported Chinese solar power components were originally put in place during the Trump administration in response to American solar manufacturers claims that China was harming their business by flooding the market with inexpensive components.

President Joe Biden in February extended the tariff for another four years.

The Department of Commerce’s investigation is being launched in response to a complaint filed by Auxin Solar, a photovoltaic solar manufacturer based in California’s Silicon Valley.

In November, the department rejected a similar request by a group of anonymous petitioners called the Solar Manufacturers Against Chinese Circumvention because the anonymity of the petitioners could hamper a full inquiry into the matter.

In its petition, Auxin Solar claims that the solar cells imported from Cambodia, Malaysia, Thailand, and Vietnam are identical to those from China that are subject to tariffs. Auxin also provided the names and addresses of the producers allegedly circumventing the tariffs.

Further, Auxin said, certain solar cell and module processors in Cambodia, Malaysia, Thailand, and Vietnam obtained needed materials, such as silicon wafers, silver paste, silane, solar glass, aluminum frames, junction boxes, ethylene vinyl acetate, and backsheets, from China “either from, or with the assistance of, their Chinese parent solar conglomerates”

In its filing with the Department of Commerce, Auxin also submitted a BloombergNEF report stating that 70 percent of the actual value of the solar equipment imported into the United States from Southeast Asia accrues to China where key, pre-assembly steps take place.

Auxin’s filing also noted that China had invested $643 million to $2.1 billion in polysilicon enrichment facilities while “Chinese solar conglomerates’ investments in solar cell and/or module facilities in the third countries ranged from as little as $7.7 million to a maximum of $160 million.”

In its response to Commerce’s announcement, SEIA said the decision “responds to the self-interests of one company and will lead to more market volatility and job losses. Additional tariffs will cause the loss of 70,000 American jobs, including 11,000 manufacturing jobs.”

SEIA cited a Wood Mackenzie report that argued that higher tariffs on solar components could cause solar deployment to crater by 16 gigawatts annually.