President Joe Biden loosened tariffs placed on solar panel imports by the Trump administration Friday, paving the way for Chinese companies to produce more panels for American consumers.
Biden issued a proclamation Friday morning, increasing the tariff-rate quota on solar equipment, or the amount of solar panel components Chinese manufacturers can send to the U.S. before receiving a penalty. The action means Chinese solar cell makers may send up to 5 gigawatts (GW) of capacity, double the previous amount of 2.5 GW, to the U.S. before being hit with a levy.
The White House action also exempts bifacial solar panels, or panels that absorb sunlight from both sides. Such panels, which are increasingly common, are often used in industry-scale projects and are believed to be the “future of the industry.”
“By excluding bifacial panels, we will ensure that solar deployment continues at the pace and scale needed to meet the president’s ambitious climate and clean energy targets and create good jobs at home,” the White House said in a statement, The Associated Press reported.
Biden has pushed renewable energy alternatives, including solar and wind projects, aggressively since taking office last year. The White House has outlined plans to ensure the entire U.S. grid is carbon-free by 2035 and the economy reaches net zero emissions by 2050.
In January 2018, former President Donald Trump introduced the so-called safeguard tariff on solar cells, set at 30% and designed to phase down by 5% annually. Trump said the tariff helped to revitalize the domestic solar panel industry less than two months after issuing the proclamation.
China produces more than 90% of the global supply of solar wafers, a key component in panels, according to a 2021 analysis from the research service BloombergNEF. Companies based outside of China and Canada produce just 4% of the wafer supply.
U.S. labor unions have supported the tariff, saying it protected U.S. jobs, according to the AP. Solar panels and components are manufactured at a lower price abroad using cheap, and sometimes forced, labor.
“The AFL-CIO is calling on the Biden administration to take the commonsense actions needed to ensure the United States establishes a domestic solar manufacturing industry,” the American Federation of Labor and Congress of Industrial Organizations’ executive council said in October 2021.
“This must begin with trade policy—and a commitment to maintain, strengthen and expand the withhold release order (WRO) applied to solar products produced in whole or in part with forced labor,” the group said.
In November 2021, the U.S. International Trade Commission recommended that Biden maintain Trump’s solar tariff at the same level to “prevent or remedy serious injury to the U.S. industry.”
But the Solar Energy Industries Association (SEIA), which represents companies worldwide, opposed Trump’s tariff on grounds that it would lead to tens of thousands of lost jobs. The group supported Biden’s modification to the tariff Friday despite urging the president to rescind it entirely in November.
“Today’s decision recognizes the importance of this innovative technology in helping to improve power output and lower costs in the utility-scale segment,” SEIA President and CEO Abigail Ross Hopper said in a statement. “It is a massive step forward in producing clean energy in America and in tackling climate change.”
“We also support the administration’s decision to increase the tariff rate quota for solar cell imports,” Ross said. “This will benefit both domestic module manufacturers and their customers in the residential, and commercial and industrial segments.”
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