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The US is preparing to hit back at China's glut of cheap solar panels by targeting its allies

Catherine Boudreau   

The US is preparing to hit back at China's glut of cheap solar panels by targeting its allies
  • US solar companies accused Chinese firms in Southeast Asia of dumping cheap solar panels on the market.
  • A glut of solar panels has cut prices in half in the past year to as low as 10 cents per watt.

The world is awash in solar panels after Chinese-owned firms flooded the market with cheap exports.

Now, seven US solar companies are fighting back against what they say is a dire threat to America's efforts to build up a manufacturing sector of its own.

Companies including Qcells, First Solar, and Swift Solar on Wednesday asked the Biden administration to slap tariffs on solar cells from four countries in Southeast Asia. The US solar companies allege that Chinese-owned firms operating in Cambodia, Malaysia, Thailand, and Vietnam are illegally undercutting the market.

The request follows an unprecedented wave of imports from the region last year. Those four countries combined accounted for about 80% of US solar panel imports during the second half of 2023, according to S&P data. There is now an 18-month supply of solar panels sitting in warehouses, and prices have been cut in half in the past year to as low as 10 cents per watt. In Germany, panels are so cheap that they're being used to line garden fences.

"In the past, we've been dependent on foreign oil from our adversaries," Tim Brightbill, a partner at Wiley Rein LLP representing the solar companies, told reporters. "We should not make the same mistake with respect to solar power. Solar was invented here. It was perfected here. There is no reason why America should be dependent on Chinese companies."

The petition by US solar companies comes at a critical time for President Joe Biden. On the campaign trail, he's touted how his policies to tackle the climate crisis are creating jobs. More than $111 billion worth of investment has been announced in renewable energy manufacturing projects alone, largely fueled by tax breaks in the Inflation Reduction Act.

But US solar makers say their businesses can't compete without stronger safeguards against China, which is outpacing US investment by hundreds of billions of dollars a year. CubicPV, a Massachusetts-based company, in February canceled plans for a new factory and cut its workforce in half, citing the collapse in solar prices.

Industry analysts estimate that China accounts for more than 80% of global solar production, with much of the rest occurring in Southeast Asia and funded by Chinese-headquartered firms.

US trade policy blocks solar panel imports directly from China. But the Commerce Department last year determined that five Chinese companies were shipping products through Southeast Asian countries to avoid steep taxes at the US border. Despite the findings, the Biden administration held off on imposing tariffs because they will be reinstated in June when a two-year waiver expires. That waiver was initially implemented to ensure the US could keep expanding solar power to meet climate goals while domestic manufacturers built up their operations.

But in recent weeks, administration officials, including Treasury Secretary Janet Yellen, have said the US is evaluating new strategies to counter China's dominance over green technology, including tariffs.

The petition by US solar companies — known as an anti-dumping and countervailing duty case — could lead to that. It kicks off a yearlong investigation by the US Commerce Department and International Trade Commission. The agencies will look at solar subsidies in Southeast Asian countries, as well as subsidies from the Chinese government. The probe will help determine whether solar panels were sold in the US at prices below the cost of production.

China, for its part, has dismissed the concerns. After Yellen met with Chinese Premier Li Qiang in April, his office told The New York Times: "The development of China's new energy industry will make an important contribution to the worldwide green and low-carbon transition."


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