US clean energy groups have launched a major lobbying campaign against potential new tariffs on Chinese-branded solar panels from four countries in southeast Asia, asserting they would cost the American domestic industry up to 100,000 jobs and “force a surrender” on President Joe Biden’s climate targets.

Acting on a February petition from California-based Auxin Solar, the Department of Commerce (DoC) opened an inquiry into whether some Chinese-branded solar panels and cells entering the US from Cambodia, Malaysia, Thailand, and Vietnam are using cheap components made in China to cut costs and dodge existing US duties in place since 2012 on panels imported directly from the Asian superpower.

To castigate alleged “pervasive backdoor dumping” through creation of circumventing operations in countries not covered by those duties, Auxin wants the Biden administration to slap tariffs ranging from 50% to 250% on affected solar products to help level the playing field on cost for domestic panel manufacturers.

Any tariffs could apply retroactively to crystalline solar PV (CSPV) panels imported as far back as November last year, law firm Norton Rose Fulbright said in note to clients. DoC has until the end of August to issue an initial decision although the deadline for a final one is not until early April 2023.

The four countries account for more than 80% of CSPV panel imports to the US and over half of total panel supply here.

“This case is destroying clean energy, and needlessly taking down American businesses and workers in its wake,” said Abigail Ross Hopper, CEO of US industry advocacy body the Solar Energy Industries Association (SEIA). “It’s unfathomable that the President would allow his own administration’s actions to be the downfall of his clean energy vision.”

The risk that anti-circumvention tariffs will have to be paid is having a chilling effect on solar activity and slow industry growth, according to the the SEIA and other trade groups, even as Biden is exhorting it to ramp development to help the US meet his goal of reducing carbon emissions 50-52% from 2005 levels by 2030.

The White House envisions solar becoming the dominant renewable energy technology by 2035, Biden’s deadline for the electric grid to become carbon-free. Solar provided 2.8% of US electricity in 2021, according to Department of Energy data.

Citing a new analysis by SEIA, Ross Hopper said that the tariff case will result in a decline of 24GW of planned US solar capacity in 2022-23, which would be more than the record 23.6GW installed last year.

A SEIA survey showed that 318 projects accounting for 51GW of solar capacity and 6GWh of attached battery storage are being cancelled or delayed, representing $52bn in private investment. Imposition of tariffs will cause a 75GW shortfall in new capacity by 2025 required to meet the Biden goal five years later, she claimed.

NextEra flags gigascale project delays

Last week, NextEra Energy, the largest US solar developer, said it expects up to 2.8GW of its own solar and storage projects face delays of one year or more due to the probe.

The company believes that DoC already settled the issue in 2012 when it concluded that when conversion of wafers into cells occurs outside of China, the cells are not subject to anti-dumping and countervailing duties applicable to Chinese imports. Later rulings by DoC in 2014, 2020, and 2021 are consistent with this, said NextEnergy CFO Kirk Crews.

“If the commerce department were to find circumvention in the current investigation, we believe it would be unwinding a decade of consistent trade practice,” he said.

Crews added such a finding would create significant price uncertainty as new tariffs on panels from the four countries would likely remain unknown until close to 2025, “as final tariff amounts are not determined for about two years after the year of importation”.

According to NextEra, US panel assemblers are, for the most part, sold out of product through 2024 and, even at full capacity, are only capable of serving 10% to 20% of domestic demand.

In a long-read blogon the American Clean Power Association (ACP) website, CEO Heather Zichal slammed the administration’s decision to “take up a cynical, selfish petition by a single small company pitted against the rest of the American solar industry”.

She argued: “[The DoC] has the perfect opportunity to evaluate this case and shut it down on the merits,” adding that, in her view, Auxin’s petition failed to meet all five mandatory elements before the department can bring new products under the scope of an existing anti-dumping/countervailing duty order through an affirmative circumvention ruling.

On Sunday, 22 US senators sent a letter to Biden expressing “serious concern” over DoC’s decision to initiate the inquiry requested by Auxin, saying the move is “already causing massive disruption in the solar industry.”

“We strongly urge your administration to make an expedited preliminary determination in this matter and carefully consider the significant policy ramifications on American businesses, workers, and ratepayers,” they wrote.

The senators included 20 Democrats and two Republicans representing Kansas and North Carolina.

American Council on Renewable Energy CEO Greg Wetstone applauded the senators for speaking out on behalf of the solar industry, calling the investigation “baseless”. He said the project delays and cancellations will inevitably lead to increased electricity costs for American families.

Despite industry opposition to the probe, solar tariffs do have supporters among Biden’s political allies including trade unions and some Democratic lawmakers that are lobbying sector supply chain companies to invest in their states.