Solar Imports Tightened

May 16, the Administration announced new actions to protect American solar manufacturing from Chinese competition, including removing the bifacial module exclusion under Section 201, announcing the end of the 24 month "bridge," permitting duty free imports from ASEAN suppliers, and enhanced monitoring of trade flows.

• Removal of the bifacial module exclusion under Section 201. Bifacial solar panels generally used in utility-scale solar projects are not currently subject to safeguard tariffs under Section 201 of the Trade Act of 1974. Since this exclusion was implemented by the Trump Administration, imports of bifacial panels have surged, now making up nearly all U.S. solar panel imports and undercutting the effectiveness of the Section 201 safeguard.   The Administration plans to imminently remove this exclusion, which will offer U.S. solar manufacturers increased Section 201 tariff protection. Importers with pre-existing contracts for bifacial solar modules to be delivered within 90 days of the removal of the exclusion will be able to certify those contracts to continue using the exclusion for that period.
• Ending the solar bridge and cracking down on stockpiling. In June 2022, President Biden initiated a temporary, 24-month bridge to facilitate certain imports from Cambodia, Malaysia, Thailand and Vietnam duty-free.  The bridge will end as scheduled on June 6, 2024, and producers in Southeast Asia that have been found to be circumventing antidumping and countervailing duties on solar manufacturers from the People’s Republic of China (PRC) will be subject to those duties.
• Additionally, in implementing the solar bridge, the Department of Commerce requires that panels imported duty-free must be installed within 180 days to prevent stockpiling. Customs and Border Protection (CBP) has announced that it will vigorously enforce this provision, including by requiring importers to provide to CBP a certification of solar module utilization with detailed information about the modules being deployed. 

• Monitoring import surges and oversupply. Imports of solar modules from Southeast Asia, where PRC manufacturers have been found to be circumventing antidumping and countervailing duties, have surged over the last year. PRC companies have recently built new capacity in these countries, targeting the U.S. market. The Department of Energy and the Department of Commerce will closely monitor import patterns to ensure the U.S. market does not become oversaturated and will explore all available measures to take action against unfair practices.

• Providing additional guidance on the domestic content bonus. The Inflation Reduction Act contains a bonus tax credit available to developers of clean energy projects that meet certain statutory requirements for sourcing iron and steel products and manufactured products from domestic producers. In the May 16 announcement, the Department of Treasury is issuing further guidance concerning the domestic content bonus. The Notice creates a new elective safe harbor that gives clean energy developers the option of relying on Department of Energy-provided default cost percentages to determine bonus eligibility.  Treasury and IRS continue to consider stakeholder comments and plan to issue further domestic content guidance to address issues not in the scope of this guidance, including adding further sectors, including offshore wind, to the new elective safe harbor table and issuing proposed rules for projects using elective pay (sometimes referred to as direct pay). In particular, Treasury and IRS, with DOE and other agencies, continue to evaluate potential options to further the IRA’s goal of incentivizing U.S. solar manufacturing, including solar wafer production.

• Supporting technology development to onshore solar wafer and cell manufacturing. The Department of Energy is announcing more than $70 million in research and development selections to seed new technologies across the solar supply chain. The 18 selected projects will address gaps in the domestic solar manufacturing supply chain, including equipment, ingots and wafers, and silicon and thin-film solar cell manufacturing, and open new markets for solar technologies like integrated-photovoltaics and agrivoltaics.

• Managing the tariff-rate quota for solar cells under Section 201 to support expanded solar manufacturing.Currently, there is a 5-gigawatt tariff-rate quota for imported solar cells under Section 201. The Administration will closely monitor the level of imported solar cells used to manufacture panels in the U.S. and will work to raise the quota by 7.5-gigawatts if imports approach the current quota level, to ensure domestic module manufacturing continues to grow while manufacturers scale production throughout the supply chain.

Anti Dumping Investigation 

The Commerce Department announced last week it has launched antidumping and countervailing duty investigations of crystalline silicon photovoltaic cells from Cambodia, Malaysia, Thailand and Vietnam.
The investigations are at the request of US producers who say that China is using the four countries to evade tariffs on its solar cells.

The petitioner is The American Alliance for Solar Manufacturing Trade Committee, whose members include First Solar Incorporated of Tempe, Arizona; Hanwha Q CELLS USA Incorporated of Dalton, Georgia and Mission Solar Energy LLC of San Antonio, Texas.

Commerce previously found that China was using the four countries to evade tariffs, but President Biden put a temporary ban on the imposition of tariffs on solar products from the countries. He argued at the time that US demand for solar products outpaced domestic production and that
US companies selling and installing solar products needed to rely on imports.That temporary waiver ends in June. 

The petition alleges dumping margins for Cambodia of 125.37 percent, Malaysia 81.22 percent, Thailand 70.36 percent and Vietnam 271.28 percent.

Alleged subsidy rates are above de minimis for all four countries.

The International Trade Commission is slated to make its preliminary injury determinations in both the antidumping and countervailing duty investigations around June 10.