The US House just voted to restore solar tariffs – here’s why that’s dumb

The House of Representatives voted to restore tariffs on solar panels made in four Southeast Asian countries – but that move would seriously hurt the US solar industry.

The 221-202 bipartisan vote sends the measure to the Democratic-controlled Senate – 12 Democrats voted for it, and 8 Republicans voted against it. President Joe Biden has said he will veto the legislation.

In 2022, President Joe Biden waived tariffs on solar products made in Cambodia, Malaysia, Thailand, and Vietnam while the US Department of Commerce (DOC) conducted an investigation into whether those imports were circumventing duties on goods made in China, thus violating US law. The DOC is expected to issue its decision next week.

The majority of legislators voted for this measure to boost US solar manufacturers who say they can’t compete with cheaper solar products made in Asia. But while that’s well intended, it’s very poorly executed, due to timing.

The bottom line is, US solar manufacturing is growing, and it does need legislative support – the Inflation Reduction Act does that. But US solar manufacturing is nowhere near robust enough to supply the huge and growing domestic demand for solar products. That’s why Biden waived the tariff – to keep the supply chain going while US domestic manufacturing ramps up.

The reinstated tariffs are going to boost costs for US solar developers and slow down the supply chain, and thus solar developments needed to fight climate change. We don’t have time to delay the fight against climate change.

While this might seem protective to US solar manufacturing, it’s harmful to US solar installation, which currently employs many more Americans than manufacturing does.

In short, the House made a bad decision that could seriously harm the US solar industry.

George Hershman, CEO of SOLV Energy, the US’s largest utility-scale solar provider, said in an email statement today:

This resolution could put companies on the hook to pay more than a billion dollars in retroactive tariffs and jeopardize tens of thousands of jobs across the country. President Biden’s pause on new solar tariffs provided a much-needed bridge for companies to deploy clean energy and keep American workers on the payroll as the US builds out a dramatic ramp-up in our domestic solar manufacturing sector.

And Abigail Ross Hopper, president and CEO of the Solar Energy Industries Association (SEIA), also issued a statement:

Today the House of Representatives failed America’s 255,000 solar workers and put the near-term impact of the IRA at risk. The legislation will impose $1 billion in retroactive tariffs and cause 30,000 Americans to lose their jobs this year.

The two-year solar tariff moratorium was imposed as a strategic bridge to stand up U.S.-based manufacturing capacity while allowing developers to keep building projects and move us toward our clean energy goals. Companies are making massive investments in manufacturing facilities across the country thanks to the IRA, and all this legislation serves to do is undercut American businesses as they invest billions in capital and seek to employ thousands of workers.

We are urging senators to see through this political charade and examine the facts at hand.

The US cannot produce enough solar panels and cells to meet demand, and the remaining 14 months of this moratorium gives us time to close the gap. The United States can get there and become a global leader in clean energy manufacturing and development. Overturning the moratorium at this stage puts that future at risk.

Read more: Here’s how a new US protectionist move is backfiring badly on the US solar industry

Photo: iStock

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