A federal investigation into whether China is getting around tariffs on solar panels has led Colorado’s expanding solar industry to warn of layoffs, price hikes and lights out for new projects.
In January, industry representatives and US Energy Information Administration They expected 2022 to be a year full of new events Solar generation. Now, the Commerce Department is looking into allegations that China is channeling its boards through other countries to circumvent US tariffs, which, if confirmed, could lead to huge tariffs that could be retroactive to November 2021.
Four Southeast Asian countries under scrutiny account for more than 80% of US imports of solar panels, and tariffs on products could eventually jump 50% to 250%. The situation threatens the US solar industry and efforts in Colorado and nationwide to reduce greenhouse gas emissions and promote the use of renewable energy, said Mike Krueger, president and CEO of the trade group. Colorado Solar Energy and Storage Association.
“We will likely see job losses over the summer when we shouldn’t because customer demand is still going through the roof,” Krueger said.
Krueger added that at least 70% of solar companies in Colorado said they could face layoffs or furloughs.
The Solar Energy Society has served notice to Colorado Public Utilities Commission The investigation is causing “extreme uncertainty” for the industry, which may have to delay and cancel projects or renegotiate deals.
“We pulled everything from the pipeline we were going to build for this year except for one project,” said David Amster-Olszewski, founder and CEO of SunShare, a leading community solar energy company based in Colorado.
About 70% of respondents to a survey conducted by Solar Energy Industries Association He said at least half of their workforce and $52 billion in investments in large-scale projects across 39 states are at risk. In Colorado, 75% of businesses reported delays in getting supplies or canceling orders and threats to $870 million worth of projects.
The Ministry of Commerce began an investigation on April 1 into the claims by Auxin Solar, The California-based solar panel manufacturer said China evaded tariffs by shifting its products through Cambodia, Malaysia, Thailand and Vietnam. Tariffs imposed during the Obama administration are intended to prevent government-backed solar panels made in China from unfair competition with panels made in the United States.
A problem, Krueger said, is that solar panel production in the United States is small and not generating “anything close enough to meet demand.”
“Even[production]that is done locally uses Asian inputs, whether they are cells or units,” Krueger said.
Krueger said the possibility that any significant retroactive tariff increases until November, when an initial complaint was filed, has frozen the flow of most incoming parts into the United States.
An initial decision is expected in August.
Colorado Senators Mike Bennett and John Hickenlooper They joined a group of bipartisan colleagues in calling on President Joe Biden to speed up the investigation and take the possibility of retroactive charges off the table. Their letter to Biden on May 1 said higher tariffs would hurt the nation’s solar industry and raise utility rates for customers.
Governor Jared Polis sent a letter on Tuesday asking Commerce Secretary Gina Raimondo to quickly end the investigation and not impose tariffs.
“Trade should promote, not prevent, growth in the US solar industry,” Polis said. “Colorado’s solar and storage industry employs more than 9,400 hard-working people across the state and has been one of the fastest industries to recover and grow during the pandemic.”
There are approximately 350 solar companies in Colorado.
Polis said the investigation does nothing to stimulate the US solar energy industry, but it will interfere with Colorado’s goals to reduce greenhouse gas emissions and tackle climate change.
Mamoun Rashid, CEO of Auxin Solar, which filed the petition with the Commerce Department, said in an email that the investigation will boost the solar energy industry in the United States and reduce dependence on other countries. The Minister of Commerce explained that the law requires fact-finding and logical decisions, he said.
“Until the investigation is complete, any predictions are just speculation,” Rashid said.
The Trump administration has imposed tariffs on solar panels and cells from other countries. Fees fell from 30% to 15% in four years. The Biden administration kept the 15% tariff, but took away some equipment and increased the amount of solar cells that could be imported duty-free.
Boulder-based Namaste Solar has postponed project schedules due to an abrupt halt in importing most solar cells and modules used by US companies. Depending on what happens in the investigation, the company may eventually have to cancel projects and may face significant price increases, said Elliot Abel, co-owner and director of business development.
“It all comes on top of the fact that we still haven’t recovered from the pandemic,” Abel said.
Like many companies, Namaste and other solar companies have dealt with supply chain disruptions that erupted during the coronavirus pandemic. Inflation and labor shortages are other challenges.
Abel said investigation and uncertainty about tariffs have hampered the business at a time when demand is surging and solar companies are trying to take advantage of federal tax breaks.
Credit of 26% on commercial solar facilities is set to drop to 22% next year. Biden proposes Rebuilding Better, which has been suspended in Congress, increasing the appropriations and extending them for 10 years.
Abel said he understands the push for more solar panel manufacturing in the United States.
“We are local. We are employee owned. We are as local as it gets. “We would like to see more local manufacturing as well,” Abel said. “We would like to see a political environment that encourages private investment in domestic manufacturing. Retroactive tariffs are not the way to get there.”
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