President Joe Biden authorized the Defense Production Act to spur US manufacturing of solar and several other forms of clean energy, the White House announced Monday.
Biden authorized the Energy Department to use the DPA to speed up domestic manufacturing of solar panel components, energy-efficient heat pumps, building insulation, electric transformers needed for the power grid and equipment like electrolyzers and fuel cells. The White House also announced it will leverage the power of the federal government’s purse for clean energy, using federal procurement to increase US solar manufacturing.
The White House also announced a two-year suspension of anti-circumvention tariffs on solar panels that have effectively ground much of the US solar industry to a halt, after intense lobbying from much of the US solar industry. US solar installers and trade associations said the threat of these tariffs had a chilling impact on the industry, after the Commerce Department launched a tariff probe in March. Because of the steep, retroactive tariffs that could result from the probe, hundreds of utility-scale solar projects in the US have been delayed or canceled, and solar industry workers laid off as a result.
The Commerce tariff investigation into whether four countries in Southeast Asia that supply about 80% of US solar panels and parts – Cambodia, Malaysia, Thailand and Vietnam – are using components from China that should be subject to US tariffs has not concluded.
While a senior administration official stressed the White House is not interfering with Commerce’s quasi-judicial process, they also defended the new two-year pause on tariffs.
“That is a process for which we are reinforcing the integrity” of the Commerce investigation, the official said. “It will continue to run its course and it will continue to be advanced by the Department of Commerce in a manner that is consistent with their regulations and internal processes.”
The official said Biden’s executive orders would reference climate change as a rationale to take executive action, as well as the Western megadrought drying up water for hydroelectric power in states including California.
“What we’re seeing is a confluence of the impacts of climate change – the droughts out West, for example, reducing the output of our hydropower resources,” the official said, adding it is crucial to deploy more clean energy like solar to make up for that lost electricity generation.
Assistant Secretary of Commerce for Enforcement and Compliance Lisa Wang said in a statement the Commerce probe would continue “uninterrupted,” and that “whatever conclusion Commerce reaches when the investigation concludes will apply once this short-term emergency period is over.”
“In accordance with the President’s declaration, no solar cells or modules imported from Cambodia, Malaysia, Thailand and Vietnam will be subject to new antidumping or countervailing duties during the period of the emergency,” Wang added.
Biden’s decision was applauded by some US solar companies and blasted by others.
“President Biden’s decisive leadership enables companies like mine to move forward on stalled projects and bring solar workers back to our jobsites,” said George Hershman, CEO of utility-scale installation company SOLV Energy. But Hershman emphasized the continuation of the Commerce probe would linger over the industry and urged Commerce officials to end the case soon.
Other companies not hurt by the Commerce probe, like US-based solar manufacturer First Solar, said the decision was a blow to US manufacturing of solar panels.
“Today’s proclamation directly undermines American solar manufacturing by giving unfettered access to China’s state-subsidized solar companies for the next two years,” said Samantha Sloan, vice president of policy for First Solar.
Some Democratic and Republican lawmakers from states where solar is a large employer had blasted the administration for the probe. Last month, Sen. Jacky Rosen of Nevada questioned Commerce Secretary Gina Raimondo about the investigation and took to the floor with colleagues to complain about job losses in her state resulting from the threat of tariffs. Rosen and other Democrats were also joined by Republicans including North Carolina Sen. Thom Tillis in their concerns about the retroactive tariff threat.
In a statement, Rosen called Biden’s announcement a “positive step that will save American solar jobs.”
“The risk of additional tariffs on imported solar panels would have been devastating for American solar projects, the hundreds of thousands of jobs they support, and our nation’s clean energy and climate goals,” Rosen said.
This story and its headline have been updated with additional reporting.