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This Wednesday, we are talking about prices.
Specifically, we’re talking about the Biden administration’s announcement last week that he launch an investigation in solar panels and components imported from Southeast Asia. The investigation aims to determine whether China circumvented existing tariffs by selling solar components at reduced prices to Cambodia, Malaysia, Thailand and Vietnam, which were then assembled and sold in the United States. If so, it could result in savage and retroactive anti-dumping actions. tariffs on solar imports.
This decision highlights the difficult situation in which the White House finds itself. On the one hand, the Biden administration wants real action on climate change. For that, we need solar energy, and lots of it: US Department of Energy estimates that to decarbonize the grid, we will need to derive 40% of all our electricity from solar power by 2035. This is equivalent to installing 60 gigawatts of solar power every year from 2025 to 2035. For context, the United States installed around 20 GW in 2021, and at least two-thirds of all newly installed panels were imported.
On the other hand, the White House is worried about China for a multitude of political and economic reasons and does not want to cede territory in the clean energy arms race. Tariffs on incoming solar panels and components incentivize domestic purchases and, in theory, increase demand for US-made products.
While several domestic solar manufacturers welcomed the decision, including California-based Auxin Solar, which originally requested the probe, the announcement was derided by much of the industry as well as climate groups arguing that if tariffs are enforced, it will cripple America’s ability to install cost-effective solar power and meet its climate goals.
American Clean Power, a group representing the interests of renewable energy companies, went so far as to describe the Biden administration’s speech on support for solar energy [as] empty rhetoric,” and urged the White House to “immediately reverse this decision.”
Even if tariffs are not enforced, the announcement has thrown large swaths of the solar industry into limbo as funding for future projects becomes uncertain. In the wake of the The latest and most disastrous IPCC report on climate changethe world can ill afford additional friction in the renewable energy sector.
Dan Siegel, CEO of Birch Creek Development, a large-scale solar company based in Los Angeles, is among those frustrated by the survey. “I don’t think anyone would have assumed, from 2021, that the environment for solar energy development would be any worse now than it was under the Trump administration,” Siegel told dot. THE. “There are plenty of studies to show you that pricing doesn’t actually create manufacturing in the United States. All this only inflates the costs of building solar energy [panels]which is simply passed down the line to [solar power] developers then, ultimately, energy consumers.
Siegel is among those advocating policies that would promote the growth of the U.S. solar industry without imposing tariffs on imports. Expanding solar tax credits and offering subsidies to industry, for example, could help grow the U.S. solar sector without increasing the cost of existing projects through tariffs, he said.
While such policies are unlikely to entirely close the manufacturing gap with China, they could provide U.S. solar producers a seat at the table and, more importantly, give the world a chance to keep global warming down. . below 3 degrees Celsius this century. — David Shultz