The solar panel supply change just can't seem to catch a break.
Last year we suffered through major project delays as soaring polysilicon prices together with general supply chain issues created a global solar panel shortage.
Now, just as manufacturers are finally able to ramp up production to meet demand, the US Department of Commerce (DOC) has announced it will be placing tariffs on five of the biggest solar producers. The affected firms are:
BYD
Longi Green Energy
Canadian Solar
Trina Solar
New East Solar.
The DOC's decision wasn't unexpected, however, since it's pretty much identical to the preliminary findings the agency made when it began investigating the same five Chinese firms in December.
It could have been worse
The five manufacturers were found guilty of circumventing duties on Chinese goods by shipping their solar panels through Vietnam, Malaysia, Thailand, and Cambodia.
It could have turned out even worse, however. There were legitimate concerns that tariffs would be imposed on all imports from those four countries—which account for around 80% of the US supply of solar panels.
Still, the five firms the DOC ultimately did decide to sanction are all major manufacturers. So the new tariffs are bound to hamper the industry's ability to meet demand.
Solar industry reacts
The industry immediately responded by pointing out that the DOC's decision threatens the boom in solar manufacturing created by the Biden administration's Inflation Reduction Act.
"The U.S. Department of Commerce is out of step with the administration's clean energy goals, and we fundamentally disagree with their decision," according to Abigail Ross Hopper, president of the Solar Energy Industries Association.
In the past, anti-dumping tariffs have run as high as 50% to 250%. That's why the DOC's mere preliminary decision to impose tariffs on the five firms in question back in December caused a worrisome 16% decrease in US solar deployment.
So it's no wonder that the solar industry reacted to the agency's final determination with alarm.
Trina Solar has also responded to the DOC's decision, insisting that the hundreds of millions of dollars the firm has spent on solar cell production in Thailand and Vietnam proves that legitimate parts of the manufacturing process are being conducted in those countries.
Trina went on to warn that the new tariffs will "increase the overall costs of virtually all U.S. bound solar products because it will constrain supply at a time when the demand for solar is skyrocketing."
Some good news
But the news isn't all bad.
Back in June of last year, the Biden administration imposed a two-year moratorium on any new solar tariffs.
That means the DOC's new solar tariffs can't take effect until June of 2024.
So, if you've been putting off saving money on energy by switching to clean and renewable solar power, there's still time to act before the inevitable price hikes caused by these new tariffs start to kick in.