There’s a fine line between supporting domestic solar manufacturing and allowing less-expensive imports to flood the market, and the Biden administration is tip-toeing it.
On Monday, President Biden increased the tariff-rate quota (TRQ) on solar cell imports to 12.5 gigawatts (GW) from 5 GW. That means U.S. manufacturers can import up to 12.5 GW of cells per year before hitting the threshold for paying a 14.25% tariff.
That tariff was originally put in place by the Trump administration in 2018 under Section 201 of the 1974 Trade Act to allow the emerging U.S. solar manufacturing sector to compete with primarily Asian imports. The threshold was initially set at 2.5 GW, which Biden later bumped up to 5 GW before this week’s latest change. According to the USITC, the 5-GW TRQ was eclipsed by June 2024 when imports reached 5.2 GW year-to-date, meaning this move will provide some certainty (and a little relief) to domestic manufacturers.
“I have determined that the domestic industry has been making and is continuing to make a positive adjustment to import competition, shown by increased actual and planned module production; various announcements of planned domestic cell production; and improvements in several of the domestic industry’s financial, trade, and employment indicators,” reads part of Biden’s proclamation. “Furthermore, I have determined that expected domestic module production and associated imports of CSPV cells have increased such that it is necessary to modify the action taken in Proclamation 9693, as extended by Proclamation 10339, by expanding the TRQ to unchanging within-quota quantities of 12.5 GW.”
Domestic solar manufacturing continues to make headway, but there isn’t nearly enough domestic cell production to meet the demand of domestic module production. In order for the United States to continue to scale and ultimately compete with Asia, stopgap measures like this one appear to be necessary. Abigail Ross Hopper, president and CEO of the Solar Energy Industries Association (SEIA) applauded the decision in a statement released to Renewable Energy World.
“SEIA strongly commends President Biden’s decisive action to support American solar module manufacturers by raising the Section 201 tariff rate quota on cells,” Hopper wrote. “This move provides an important bridge for module producers to access the supply they need while the United States continues to progress on solar cell manufacturing. This decision will help create a strong, stable module manufacturing sector that can sustain robust cell production in the long run.”
“Federal clean energy policies are fueling a surge in domestic manufacturing investments across the country, which are helping us secure our supply chain and uplift American communities,” SEIA’s CEO continued. “The President’s recent actions are critical for maximizing the impact of these policies and ensuring the long-term success of American solar manufacturing.”
Earlier this year, a midterm report monitoring the industry issued by the U.S. International Trade Commission found that the tariff safeguard measure has resulted in positive adjustments from the domestic industry in light of increased actual and planned module production; various announcements of planned domestic cell production; and improvements in several of the domestic industry’s financial, trade, and employment indicators.
In September of last year, most of the major players in the domestic solar industry petitioned the Biden administration to modify the safeguard by either eliminating the TRQ entirely or increasing it to 20 GW per year.
“Domestic module production coupled with current lack of sufficient domestic cell production will require domestic module producers to rely on imports in the near term, in excess of the current 5 GW within-quota TRQ amount,” reads the relevant section of Monday’s proclamation.
The modifications made via the proclamation are effective on goods entered for consumption or withdrawn from warehouse for consumption on or after August 1, 2024.
