The Department of Commerce is investigating a trade complaint that could result in substantial new tariffs on solar imports. It has thrown the US solar industry into a tailspin, with potentially much worse to come. I talk with the head of the Solar Energy Industries Association about the merits and possible effects of the case.
I guess y'all don't see many "American Oil From American Soil" shirts, stickers, etc. in your neighborhoods. So, yeah, the complaint, regs, and DoC response don't make sense to our neo-liberal brains, but it's part of the political milieu in which PV deployment exists.
PV, and wind are somewhat politically toxic in large swaths of rural America. That happens to be where large scale wind and solar "farms" need to go. And there are union/blue collar workers in swing districts in Michigan and Wisconsin who need to be courted. They also know that many installation jobs are quick "gigs" and not as "good" as factory jobs.
So SEIA, Biden administration, progressive states etc. need to scream and holler and take whatever actions they can to get more manufacturing here. Hello, Jay Inslee, Mr. Evergreen, blue/green, whatever. What does it take to get the Moses Lake silicon plant open and get somebody to saw wafers nearby? ASAP. I keep hearing this about to happen.
In any case, where cells are shipped to SE Asia from China, for assembly to modules, that is probably "circumvention," and some fraction of the tariffs on Chinese modules should be applied. I can't see how the tariffs would be higher than those on fully-Chinese modules now. If DoC/Raimondo has some discretion, that seems like a call to make.
Recently, some wafer, maybe even ingot, production is being developed in SE Asia. That's probably not "circumvention," as little of the total value would come from China.
Energy is different than toasters. When I started in EE/RE, it had support beyond enviro reasons because it was viewed as reducing the use of Arab oil, and saving "natural" gas which was running out. Now, essentially all FF energy in the USA is made in the USA that dynamic is gone.
I would disagree with David on the idea that we don't want dirty silica/quartz mining/silicon processing here. That not be too labor-intensive. The ingot processing is energy intensive, but has been done here not too long ago, and somehow "we" should be able to dedicate cheap hydro electricity to that instead of crypto-mining. We process lots of gas into plastics and chemies, and lots of soy and corn into whatnot.
I wish my corporate lawyer father was still around to discuss retroactive tariffs and "ex post facto." I'm pretty sure his reaction would be similar to David's.
Thanks for covering this. It's really quite maddening.
A recent podcast by Ryan Grim (Deconstructed, published by The Intercept) interviewed a progressive trade policy expert and she basically said these concerns are overblown.
The trade policy person Ryan interviewed is Lori Wallach. She left out key details like the tariffs being retroactive and accused SEIA of being funded by Chinese companies- so I could sense some bias there. But she also said the notion that the tariffs could be 200% is basically impossible because that would require more egregious violation of the law than even the accusing companies allege. Basically she is saying the Secretary of Commerce was right in her testimony that tariffs would be in the 10-20% range. Which seems right to me.
I know the Intercept has a pretty clear far-left bias but I trust Ryan, just like I trust David, to give a balanced take. David, do you think SEIA is exaggerating the potential impact here?
Sounds like this is getting handled in the short term, if I'm understanding this recent action correctly:
Appreciated this interview, but I have some quibbles. Not defending Trump's erratic use of Section 201, but saying that it's just like China is wrong. The use of tariffs does not subsidize manufacturing for export, so it does not cause harm to companies outside of the US within their own–or any other–border. Was it aimed at directly benefiting domestic companies? Yes, definitely... but only within our borders. China, on the other hand, is directly subsidizing panels for export, aiming to directly undercut non-Chinese companies everywhere.
Additionally, Commerce has launched this circumvention investigation and while Abby and SEIA expectedly think the case has no merits, it's not up to industry to tell us when a case like this has merits. Commerce has launched many circumvention cases on other products directly related to China... and guess what? Circumvention happens... kinda often. (Go ahead and google commerce circumvention steel pipe and check out the cases from 2022, 2021, 2017, 2011... just keeps going.) We have laws (i.e. circumvention of our trade laws is illegal) and if they are being broken, then that needs to be dealt with. Right? Do we decide to ignore this trade law because we need more solar generation? That's problematic to me...
The fella Fred Porter made an excellent point in the comments section about the sheer politics of this situation. People should read that comment closely, and especially not scoff at politics being a part of this. Politics are deeply embedded in energy issues, as Fred elegantly points out.
Your take on trade being a binary, two way street is faulty. Producers rely on their customers sure... but most suppliers have multiple customers. But your point that there is tension btw lack of domestic production and climate progress being based on imports was right... and even tho Abby said you were wrong, her point was more that that doesn't need to continue.
Finally, the comment on raw material production being "gross" or a "low rung" was ridiculous and, frankly, kind of elitist. That production does not have to be disastrously dirty (but it happens to be... especially in China), and you claim that we should have "buying standards." There's been an effort to do that sort of thing for decades, and do you know how that sort of thing is adjudicated? Trade policy... which we would then ignore if a country violated said buying standard in the future if we didn't like how it impacted future climate policy? Also, sidenote, we used to have a significant portion of polysilicon production in the US. No reason we cant again. I do really appreciate Abby lifting up the BBB construct. Totally agree about the importance of it.
Look, this whole thing sucks, and we're in the middle of waiting for Commerce to come to a preliminary determination, which means we're in a fever pitch moment. But it would really suck if some climate conscious folks decide that decent trade policy can just be thrown out the window when it impacts renewables. That would be reallllly disappointing.
One quick note, South Korea, as we speak, is importing very efficient solar cells and panels (modules) to the U.S.; so if any one wants them, just call South Korea and order a lot. Secondly, solar cells are made from Silicon (which is plentiful sand on the beaches) and 85% of solar cells produced world-wide are silicon solar cells. The other materials needed are phosphorous and boron, which are not hard to get at all, and aluminum (easy). Another thing to note is that these materials have to be as pure as possible, i.e. without impurities - which is also pretty easy to do. The next step is to bake everything in an furnace at about 900 degrees for about 3 hours. These solar cells will last for 20 years of usage.
I think you alluded to the one thing I admired about the trump presidency; he used the powers allotted to him, those that weren’t explicitly restricted from him, and broke norms to accomplish his goals, shitty as they were.
As a species, we seem to be hell-bent on destroying ourselves.