From the Frying Pan Into the Fire:
Circumvention Inquiry Puts Nation’s Solar Industry at Risk

With Governor Ron DeSantis’s recent veto of HB 741, all of us in Florida’s solar energy industry breathed a sigh of relief and were thrilled to go back to the business of installing solar energy systems. But now another, wider storm is brewing and the impacts have already been swift and damaging.

In March, a small, domestic solar panel producer, Auxin Solar, requested a U.S. Department of Commerce investigation into imports of crystalline silicon photovoltaic modules and cells from Cambodia, Malaysia, Thailand and Vietnam. In short, Auxin Solar alleges that the Southeast Asian products were actually originating from China, as a way for suppliers in China to dodge tariffs, while the influx of these cheaper products hinders the development of solar manufacturing in the U.S.

About 80% of the US supply of crystalline silicon solar panels comes from the four Southeast Asian countries that house operations under investigation. Not only does this inquiry threaten to irreparably damage any recent progress in decarbonization, solar experts have noted that previous tariffs on solar panels have not resulted in any significant corresponding solar manufacturing presence in the U.S.

The solar industry was already being disrupted by inflation, higher interest rates, a tight labor market and various restrictive policies in states across the country. Any delay or loss of projects means further detrimental economic impacts to business owners as well as risking the skilled labor pool that’s already in place.

Just the initiation of the circumvention inquiry has had a dramatic impact, effectively freezing the module supply from all of the impacted countries. Projects are being delayed or canceled entirely. A shocking 83% of the respondents to a survey distributed by the Solar Energy Industries Association (SEIA) report significant module supply cancelation or delay.

Other key data points from the survey:
• 70% of respondents report that at least half of their solar and storage workforce is at risk
• Over 200 respondents report that their entire solar and storage workforce is at risk
• 4/5 of respondents report at least half of their current year solar pipeline at risk; many report an even larger risk to their 2023 pipeline.

Read the full survey results HERE.

At Brilliant Harvest, we are already seeing a 20% increase in the cost of solar panels – a cost that, regretfully, must be passed onto our customers. We are also seeing a troubling slowdown in supply (among other, continuing supply chain impacts due to the pandemic), which threatens project timelines.

In response to this situation, the SEIA wrote a letter to the U.S. Department of Commerce stating, among other things: “The Department must also be aware of the severe damage this investigation is having on the U.S. solar industry. As a result of this case, solar installation forecasts for 2022 and 2023 are being cut by 46%. SEIA also anticipates a loss of 24 gigawatts of planned solar capacity over the next two years, which will lead to an additional 364 million metric tons of carbon emissions by 2035.”

Click HERE to read SEIA’s letter in its entirety.

The baseline forecast for reaching the U.S. climate goals (100% clean energy by 2035 and net-zero economy-wide emissions by 2050) is now endangered and the prospect of achieving climate goals grows less likely each day this investigation continues.

What makes this situation even more maddening is that, according to Canary Media, the tariff circumvention inquiry “is predicated at least in part on a misinterpretation of data.” Apparently, Auxin Solar relied on research by BloombergNEF – but that Auxin misinterpreted and misused that data. (Read more about that HERE.)

What people need to realize is that bringing the supply chain to the U.S. would take YEARS:
• Siting and permitting a U.S. plant could take a year or more.
• Construction and production ramp-up could take an additional 2-3 years.
• Interim devastation to the downstream industry would reduce the domestic customer base for prospective domestic manufactures.
• As experienced workforce leaves the industry due to the supply bottleneck and resultant project delays or cancelations, recovery could take years.
• Without manufacturing incentives and the right policy environment, these tariffs (like tariffs before them) are not enough to draw billions of investment in new domestic manufacturing. It is simply still too risky for many manufacturers.

In response to this situation, 85 U.S. Representatives signed a petition to President Biden expressing “grave concern” about the inquiry due to its economic and environmental impacts. Read the letter HERE.

It feels like we’re bouncing from crisis to crisis in the solar industry – from legislative barriers being erected by utility-friendly public officials, to pandemic-related supply and workforce-related hindrances, to this current tariff circumvention inquiry. All with the climate crisis looming. Just know that Brilliant Harvest is committed to working through whatever challenging headwinds we encounter to continue our work and do our part to save the planet – one rooftop at a time!

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