Biden Halts New Tariffs on Solar Panels

The two-year halt on tariffs aims to alleviate import costs and ease supply-chain logjams that have hampered growth in the solar-energy industry. This move should allay some industry concerns and increase domestic development.

President Joe Biden recently took significant action to address the slowdown in domestic solar-energy deployment. In an executive order (published here), he announced a two-year moratorium on new tariffs for imported solar panels.

This moratorium is welcome news to many in the solar industry. In March 2021, Auxin Solar, a California-based solar-panel assembler filed a petition requesting that the U.S. Department of Commerce (“DOC”) investigate solar cells imported from Malaysia, Thailand, Vietnam, and Cambodia. According to the petition, imports from those countries improperly circumvented tariffs against Chinese-made solar cells. In March 2022, the DOC opened an investigation of Auxin’s claims.

DOC’s investigation triggered a sweeping reaction in the solar industry. More than 300 projects and 24 gigawatts of solar projects were jeopardized due to fears regarding the outcome of DOC’s investigation. DOC has the power to retroactively impose tariffs of up to 249% of the cost of solar cells found to be have been improperly imported. Such tariffs would have crippled the solar industry.

Following President Biden’s executive order, DOC’s investigation will continue. The prospect of tariffs after the two-year suspension remains unclear. Still, the moratorium on tariffs should boost confidence among solar developers and alleviate supply-chain logjams.

Additionally, to counteract opposition from domestic manufacturers, Biden announced that he will take steps to boost domestic manufacturing of solar panels. Specifically, he will invoke the Defense Production Act, 50 USC section 4501 et seq., to support the industry and increase federal purchases of domestic solar modules.

Baird Holm attorneys have significant experience in all forms of renewable-energy development. We will continue to monitor these changing policies and provide updates as appropriate. Please do not hesitate to contact us if you have questions.