Investing in the long-term health of the American solar industry – pv magazine USA
Extending Section 201 tariffs for another four years and increasing the quota on imported cells is clearly in the long-term best interest of all downstream participants.
I will be testifying today on behalf of LG before the United States International Trade Commission at a hearing regarding the extension of the Section 201 “safeguard” tariffs on imported photovoltaic modules and cells.
If you are a developer, installer, or planning on purchasing solar panels for your business, I agree that you probably don’t want these backup rates to continue.
Trust me – I understand your position and, as someone who is also deeply invested both personally and professionally in the long term health of the solar industry, I sympathize with it.
But LG’s position – asking the ITC to extend tariffs for an additional four years and increase the quota on imported cells – is clearly in the long-term best interests of all downstream participants. Do not believe me ? Listen to me.
The sky hasn’t fallen yet (or is it?)
Opposition to tariffs in 2018 highlighted significant project cancellations and job losses if tariffs were to be imposed.
At the macro level, the solar industry has beaten all expectations during the tariff period in every category, from megawatts deployed to jobs created. For the anecdote, I hear that today more and more companies cannot build projects because of a lack of manpower rather than costs related to tariffs which slow down or stop projects.
However, the Q4 2021 solar supply chain is starting to look like a lost line from Billy Joel’s “We Didn’t Start the Fire”.
Between the skyrocketing logistics costs, which are made worse by port delays, the electricity crisis in China forcing factories to operate at significantly reduced capacities, and the looming threat of US customs and security detention modules. border protection associated with forced labor, the solar supply chain exiting Asia poses a significant risk.
Many have argued that the United States should redouble its efforts to expand downstream deployments using cheap imported hardware. The obvious downside to this strategy is now painfully exposed. When that supply chain falters, there is no other option.
Solar manufacturing in the United States exists and is growing
Today, there is enough manufacturing capacity in the United States, already operational or in commissioning, to meet about one-third of installer demand.
Barely insignificant, but still with a lot of upside potential. What is remarkable is that much of this capacity has been brought online since the entry into force of section 201 tariffs and many more have been announced.
Although the jobs created by these factories represent only a fraction of the jobs in the installation sector, the reality is that these jobs are complementary in nature. Factories supply installers. Having alternative and diverse supply chains will ensure that the product continues to flow into the market and thus cover the risks of the foreign supply chain. National factories directly and indirectly create jobs and protect jobs.
… an additional four years of Section 201 tariffs is an investment in the long-term health of the US solar industry.
Establishing a national supply chain is critical to the long-term health of the U.S. solar industry as a whole, as it provides a more sustainable and reliable business model for years to come. Simply put, four more years of Section 201 tariffs is an investment in the long-term health of the US solar industry.
Companies planning to make large capital investments need to have some short-term certainty of the market economy to make these investments. As quickly as China entered an energy crisis and its factories shut down, they could fight back.
Tariffs alone will not be enough to create long-term sustainable U.S. jobs in the solar industry. They must be combined with legislation designed to support domestic manufacturing. The Solar Energy Manufacturing for America Act (SEMA) is a major step in this direction.
It would offer tax credits to US manufacturers all along the supply chain, from polysilicon production to fully assembled cells and modules. SEMA would revitalize the US manufacturing sector with skilled, well-paying jobs for the solar industry and, more importantly, help diversify upstream supply chains without creating upward pressure on costs.
This bill, and other similar green jobs laws, would boost home solar energy manufacturing and create important, long-term, stable jobs along the national supply chain. As we move to clean energy as a nation, creating green energy jobs is a key part of the Biden administration’s ambitious climate goals.
In four years, there will be no more backup tariffs. But will there be a local supply chain that is strong enough to help deal with wild fluctuations in the overseas market?
The actions we take today – as a sector as a whole – will affect our ability to continue to grow as we respond to the imperative to install solar power to help protect our environment and grow our economy. .
The views and opinions expressed in this article are those of the author and do not necessarily reflect those of pv magazine.
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