President Joe Biden is using the Defense Production Act to boost solar panel production in the United States while also declaring a two-year tariff exemption on panels from Southeast Asia.
He’s attempting to relaunch an industry critical to his climate change mitigation goals, which advocates claim has been hampered by a federal investigation.
The moves are being implemented through executive actions and presidential proclamations, according to the White House.
They come after months of complaints from industry groups, who claim that supply chain issues are slowing the solar industry due to an ongoing Commerce Department investigation into possible trade violations involving Chinese products.
The Commerce Department announced in March that it was looking into solar panel imports from Thailand, Vietnam, Malaysia, and Cambodia, citing concerns that products from those countries are skirting anti-dumping rules in the United States, which limit imports from China.
Biden’s actions, according to White House officials, aim to boost domestic production of solar panel parts, building installation materials, high-efficiency heat pumps, and other components such as cells used in clean-energy fuels.
Even as the administration remains supportive of U.S. trade laws and the Commerce Department investigation, they called the tariff suspension affecting imports from Thailand, Vietnam, Malaysia, and Cambodia a stopgap measure while other efforts increase domestic solar power production.
Gas prices have risen to a new high of $4.86 per gallon.
Early Monday, Wall Street futures rose on news that the Biden administration was considering lowering solar tariffs.
The Department of Commerce has defended its investigation. In May, Secretary Gina Raimondo told a Senate panel that the solar inquiry is following a legal process that excludes climate change, supply chains, and other factors.
Nonetheless, clean energy leaders have been warning since then that the investigation — which could result in retroactive tariffs of up to 240 percent — would severely hamstring the US solar industry, resulting in thousands of job losses and jeopardising up to 80% of planned solar projects across the country.
This could jeopardise one of Biden’s top clean energy goals, as well as his Democratic administration’s push for renewable energy like wind and solar.
“The president’s announcement will revitalise solar power construction and manufacturing in the United States by restoring predictability and business certainty that the Department of Commerce’s flawed inquiry has disrupted,” said Heather Zichal, CEO of the American Clean Power Association and a former Obama administration official, in a statement Monday.
Others spoke in a similar manner. Biden’s “thoughtful approach to addressing the current crisis of the paralysed solar supply chain” was praised by Abigail Ross Hopper, president and CEO of the Solar Energy Industries Association.
Inflationary pressures divide spending between the haves and the have-nots.
In a statement, Ross Hopper said, “Today’s actions protect existing solar jobs, will lead to increased employment in the solar industry, and foster a robust solar manufacturing base here at home.”
The administration’s clean energy tax cuts, as well as other major proposals to encourage domestic green energy production, have stalled in Congress.
The Defense Production Act, which allows the federal government to direct manufacturing production for national defence, has become a tool that presidents have used more frequently in recent months.
During the early stages of the coronavirus pandemic, President Donald Trump’s administration used it to produce medical equipment and supplies.
Last month, Biden used his authority to prioritise increasing the nation’s supply of baby formula amid a domestic shortage caused by the closure of the country’s largest formula factory due to safety concerns.
Biden’s announcement, according to Jean Su, director of the Center for Biological Diversity’s energy justice programme, can “give critical momentum to the needed transition to solar energy.”
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“We hope that the president’s use of the Defense Production Act is a watershed moment for him, because he needs to use all of his executive powers to confront the climate emergency head on,” Su said.
