Biden is Trying to Bolster Solar Manufacturers Through Tax and Trade Measures - Latest Global News

Biden is Trying to Bolster Solar Manufacturers Through Tax and Trade Measures

The Biden administration is launching a series of measures it says will help promote a deeper domestic supply chain for solar panels, following appeals from U.S. manufacturers facing a surge in duty-free imports.

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(Bloomberg) — The Biden administration is launching a series of measures it says will help promote a deeper domestic supply chain for solar panels, following appeals from U.S. manufacturers facing a surge in duty-free imports.

The measures announced Thursday include increased tariffs, tax policy guidance that could boost demand for some U.S.-made solar equipment and promises of increased vigilance against signs of unfair trading.

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“We are taking these new actions this week to support the U.S. clean energy industry to ensure we are doing our part to reduce emissions and ensure that our competition with China is indeed fair,” said John Podesta , senior adviser to the president on international climate policy.

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The effort represents a response to more than a year of calls from solar companies that tariff exemptions, a surge in cheap imports of foreign modules and federal tax policy decisions would undermine the Inflation Reduction Act incentives that support domestic manufacturing and China’s green Technology would undermine dominance.

Although the law sparked a wave of promised investment in American manufacturing of solar panels and their components, several major projects have since been quietly shelved or slowed. It’s not clear whether the guidelines will be enough to quickly recalibrate the market in the U.S., where importers and developers have now amassed a large inventory of panels.

Read more: Biden’s solar factory boom slows as import market floods

The announcement came as President Joe Biden predicted an election year tough stance on China with a series of sweeping tariff increases on imports from the country, which now dominates the production of solar panels and their components – even though the technology was only invented in 1970 in the US . Three weeks ago, some manufacturers went out on their own and formally petitioned the U.S. government to impose new tariffs on solar cells and modules from four Southeast Asian countries, saying they were unfairly priced below cost and benefited from illegal subsidies.

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The Biden administration will issue an exemption allowing double-sided or bifacial solar panels, called Sec. 201 protective tariffs are currently at 14.25%. The exclusion was first introduced under President Donald Trump and then expanded under Biden. Originally intended as a modest but essential safety valve to ensure that large utility-scale solar projects could procure this equipment, it is now a widespread exception. Although Trump later tried to reverse the exemption, a federal court blocked the move.

Read more: U.S. solar production is rising, but losses are mounting, a review shows

At the same time, however, the administration is also raising the prospect of importing more solar panels into the U.S. without being affected by Section 201 tariffs. Some manufacturers argued that the domestic supply of these components is insufficient to support U.S. panel manufacturing.

They had called on the president to quadruple the existing 5 gigawatt duty-free quota for these components to support U.S. panel manufacturing as U.S. cell production capacity increases.

The administration has shied away from doing so, but said in a White House fact sheet that it would commit to an increase if the number of imported cells reaches the duty-free threshold.

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“This move represents an important bridge for panel manufacturers to access the supply they need as the United States continues to advance solar cell manufacturing,” said Abigail Ross Hopper, president of the Solar Energy Industries Association. “Today’s decision will help create a strong, stable module manufacturing sector that can sustain robust cell production over the long term.”

The administration is also pledging to be more vigilant for signs of unfair trading — and to scrutinize panels imported into the U.S. under a tariff moratorium announced by Biden nearly two years ago.

The government has already concluded that Chinese manufacturers are avoiding longstanding tariffs by assembling solar panels in four Southeast Asian countries: Cambodia, Malaysia, Thailand and Vietnam. Now, the White House said, the Energy and Commerce departments will “closely monitor import patterns to ensure the U.S. market does not become oversaturated and consider all available measures to address unfair practices.”

Read more: Asian solar imports subject to new US trade probe

Biden also will not extend a two-year holiday that removes anti-circumvention tariffs on many of the solar cells and modules imported from the four nations. And it promises that U.S. Customs and Border Protection will “vigorously enforce” that all equipment imported under the moratorium must be put into service by early December or face tariffs. This includes requiring importers to provide certifications and “detailed information” showing that the solar panels were deployed in a timely manner, the White House said.

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