The US President has ordered emergency measures to increase production of solar panels and jumpstart the Biden administration solar and other climate goals.
US President Joe Biden has invoked national security powers to significantly boost solar production and declared a two-year tariff exemption on solar panels from Southeast Asia countries in order to advance efforts to curb climate change.
Following months of pressure from the solar industry and complaints from climate activists, the Biden administration has triggered the Defense Production Act to help ease supply chain issues and delays caused by a Commerce Department inquiry into possible trade violations by Chinese manufactures. Solar panels installations have been markedly slow as a result, derailing Biden’s climate goals and transition to a greener economy.
The Commerce Department announced in March 2022 that it was investigating imports of solar panels from Thailand, Vietnam, Malaysia and Cambodia, countries that supply the US most with products for solar installations, after Chinese manufacturers were allegedly avoiding tariffs by making and shipping their products from Southeast Asia.
Industry experts have warned that the inquiry could lead to retroactive tariffs of up to 240%, resulting in thousands of job losses and disrupt 80% of planned solar projects around the country. It has already curtailed many shipments to the US, delayed and increased cost solar projects, as well as putting up to two-thirds of planned solar installations at risk.
You might also like: US President Biden Pledges To Cut Emissions By 50% By 2030
Using his presidential powers, Biden is allowing two years of tariff-free imports from Southeast Asia to ease the trade disputes, and introduced a raft of other executive actions to boost the output of solar panels, building insulation, transformers for power grids and high-efficiency heat pumps. The President is also using the Cold War era-law to invest in companies that can build renewable energy facilities and increase domestic solar panel production – which is now expected to triple by 2024, allowing more than 3.3m homes each year to switch to solar energy.
“The president’s announcement will rejuvenate the construction and domestic manufacturing of solar power by restoring predictability and business certainty that the Department of Commerce’s flawed inquiry has disrupted,” Heather Zichal, CEO of the American Clean Power Association and a former Obama administration official, said in a statement praising the move.
The Defense Production Act was created to allow the federal government to direct manufacturing production for national defence, but it has been increasingly used for other purposes, especially amid gridlocks in Congress.
In April, Biden invoked the Act to boost production of lithium and other minerals used to power electric vehicles, and just last month, he used it to boost the nation’s baby formula during a domestic shortage.
But there are some industry criticisms of Biden’s announcement. First Solar Inc, a major solar panel manufacturer has said that the two-year tariff break would provide “unfettered access to China’s state-subsidised solar companies for the next two years” and is not a “durable solar industrial policy.” Others have claimed that funding from the emergency measures would only be enough to open a few factories capable of meeting a fraction of the amount of panels the country currently imports each year.
EO’s Position: The world is rapidly losing sight of being able to stay under the 1.5C limit of global temperature rise to avoid the catastrophic impacts of climate change. We need to scale up renewable energy generation as quickly as possible. With strong investment and inter-connected regional grids over 10 years, solar has the potential to become the baseload generator of renewable energy in the US.
You might also like: How California is Leading the Renewable Energy Transition in the US