Protective measure: An employee works on solar panels at the QCells factory in Dalton, Georgia. The company is facing competition from cheaper products from Asia. — Reuters
WASHINGTON: The Biden administration is expected to grant a request by South Korea’s Hanwha Qcells to reverse a two-year-old trade exemption that has allowed imports of a dominant solar panel technology from China and other countries to avoid tariffs, two sources familiar with the White House plans say.
The news sent shares of solar manufacturers including US-based First Solar higher in afternoon trade.
The Qcells request, which has not previously been reported, comes as the company is seeking to protect a pledged US$2.5bil expansion of its US solar-manufacturing presence against competition from cheaper Asian-made products.
The solar division of South Korean conglomerate Hanwha Corp outlined the request in a formal petition to the US Trade Representative on Feb 23.
It included letters of support from seven other companies with billions of US dollars combined invested in US solar factories.
No decision has been made on the timeline of the expected reversal, the sources said.
Duties on imports of bifacial panels, the main technology in utility-scale solar projects, would be a boon to the more than 40 solar-equipment factories planned since US President Joe Biden signed his landmark climate change law, the Inflation Reduction Act, in 2022.
Those plants are critical to Biden’s plan to fight climate change, revitalise American manufacturing and create millions of union jobs.
Past trade remedies have sharply divided the US solar industry, which is dominated by installers and developers who rely on cheap imports to keep their costs low.
The top US solar trade group, the Solar Energy Industries Association (SEIA), lobbied for the bifacial exemption.
In a statement, SEIA did not address the exemption directly but advocated for an increase in the amount of solar cells that can be imported tariff-free to help companies assembling American-made panels.
“We hope the administration is prepared to directly support increased domestic manufacturing of solar modules by raising the tariff rate quota on cells,” said Stacy Ettinger, SEIA’s senior vice-president of supply chain and trade.
Biden administration officials, including Treasury Secretary Janet Yellen and US Trade Representative Katherine Tai, in recent weeks have said the United States is evaluating trade remedies to deal with threats posed by China’s massive investment in factory capacity for clean-energy goods.
The solar-panel issue goes to the core of one of Biden’s arguments for re-election: that his economic policies have begun transforming the US energy economy while combating climate change.
However, the pace of growth in the domestic solar panel manufacturing market has been cast into doubt by surging imports of cheap, Chinese panels.
A bipartisan group of US senators, led by the two Democrats from the critical election battleground state of Georgia, asked Biden earlier this year to toughen up tariffs on Chinese solar panels or face a glutted market just as clean-energy tax credits hit the market.
Qcells, which has two factories in Georgia, is the largest US producer of silicon-based solar products.
In its petition, a copy of which was seen by Reuters, the company asked Biden to revoke an exemption of so-called bifacial panels from duties first imposed by Republican former president Donald Trump in 2018 and extended by Biden, a Democrat, in 2022.
The tariffs on imported modules started at 30% and currently stand at 14.25%. They are due to expire in 2026.
Most panel imports come from South-East Asia but are made by Chinese companies there.
The United States imposed duties on some panel makers for finishing their products in Cambodia, Malaysia, Thailand and Vietnam to avoid tariffs on Chinese-made goods.
Biden waived those tariffs nearly two years ago, a policy that the White House said it will allow to expire in June.
“We’re continuing to look at all of our options to ensure that the historic investments spurred by the Inflation Reduction Act are successful,” a White House official said. — Reuters
