Solar projects on hold as investigation in southeast Asia looms

2022-09-17 02:35:15 By : Mr. Marcus Zhou

Unlike past surges in oil prices, consumers have more alternatives to petroleum products.

WASHINGTON - Solar projects are being put on hold across Texas and the nation amid fears the Biden administration will place tariffs on projects built with solar panels from southeast Asia, the Solar Energy Industries Association, a trade group, said Wednesday.

Since the Commerce Department opened its investigation last month into whether manufacturers in southeast Asia are circumventing U.S. trade laws, more than 300 solar farm projects with a capacity of more than 50,000 megawatts have been delayed or cancelled, the group reported. The largest impact is in Texas, with developers reporting more 13,000 megawatts of projects - the equivalent of approximately five nuclear power plants - now on hold.

"Project developers in Texas are having to go back to their customers and say given the uncertainty we can't go forward until we have clarity," said Jeff Clark, president of the Austin-based trade group Advanced Power Alliance. "It's just the worst possible timing for this kind of uncertainty."

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At issue is the possibility the Commerce Department will find manufacturers in Cambodia, Malaysia, Thailand and Vietnam are covertly selling Chinese-made solar panels in a scheme to avoid U.S. tariffs, as claimed last month by California manufacturer Auxin Solar.

The four nations produce 80 percent of the panels expected to be installed in the United States this year, the American Clean Power Association, another industry group, said earlier this year.

Were the Commerce Department to confirm that claim, any solar projects built since the claim was made would be subject to retroactive tariffs, said Harry Godfrey, a managing director with Advanced Energy Economy, a trade group representing clean energy technology firms.

"It has dramatically elevated prices," he said. "A bunch of suppliers (in southeast Asia) are saying I'm not shipping to the U.S. anymore. If you want the panels, you need to come here and get them."

In a call with analysts last week, NextEra Energy Chief Financial Officer Kirk Crews said they were expecting to shift between 2,000 and 2,8000 megawatts of solar projects to next year because manufacturers in Asia had ceased shipping to the United States.

The trade case comes as the Biden administration seeks to expand the manufacturing of solar panels in the United States, as part of its bid to address climate change.

At present developers largely rely on cheap solar panels from Asia to make their projects viable, presenting the Biden administration with a conundrum on how to reduce emissions while protecting American jobs.

Since early February the importation of solar cells that are the building blocks of solar panels has fallen more than 50 percent, according to the U.S. Customs and Border Protection.

And solar companies are predicting that will only continue if the trade case goes against manufacturers southeast Asia. In that scenario, solar installations are expected to decline 48 percent this year to less than 13,000 megawatts, the Solar Energy Industries Association is forecasting.

In a letter to  Commerce Secretary Gina Raimondo last week, Clark, of the Advanced Power Alliance, urged the department make a decision on the case, "as soon as possible."

"To spare our solar industry, our country and our economy irreversible harm," he wrote.

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James Osborne covers the intersection of energy and politics from the Houston Chronicle's bureau in Washington D.C.

Solar companies, homeowners and trade groups say the time involved in getting permits to connect panels to CenterPoint’s service area has gone from one month to six.