Sec. Raimondo Feels the Heat of Potentially Stalling Solar
President Biden’s Commerce Secretary Gina Raimondo was known as a champion of offshore wind and clean energy when she served as Governor of Rhode Island. But recently, she’s found herself in the hot seat over the damage her agency is doing to the solar industry. More than 300 large-scale solar projects in the United States have been canceled or delayed since the Department of Commerce launched its investigation of the industry over a single petition from one solar company, Auxin Solar.
Auxin alleges that other domestic manufacturers are guilty of evading tariffs. Meanwhile, the investigation could take months, creating industry-wide uncertainty and layoffs.
"The industry is essentially frozen,” said Leah Stokes, Associate Professor at the University of California, Santa Barbara. "It’s already leading to layoffs, to say nothing of the impact on our climate goals.”
Why It Matters
Cambodia, Malaysia, Thailand, and Vietnam provide more than 80% of the most popular modules used by American solar companies. If that pipeline for components is heavily tariffed, the industry will be frozen in the US and a significant number of jobs will be lost. More importantly, the Biden Administration’s plan to meet its emissions reductions goals depends on the rapid deployment of solar energy. If the industry remains gridlocked, it’s possible President Biden would install less new industry-scale solar in 2022 and 2023 than Trump in the final year in office.
Clean Capital: Department of Commerce Tariff | What it Means for Solar & Storage Developers (Webinar), April 27, 2022.
CNBC: US could generate 40% of its electricity using solar by 2035, September 24, 2021.
Understanding The Process
Raimondo told legislators on Capitol Hill, "My hands are very tied here … I'm required by statute to investigate a claim that companies operating in other countries are trying to circumvent the duties and I'm required by statute to have a fulsome investigation.”
However, a closer look at the statutes suggest the Secretary may have options to stop the investigation based on its merit. The Commerce Department’s regulations allow a 44-day period for parties involved in the case to challenge the basic assumptions of the circumvention petition, including a rebuttal period for Auxin to respond. That process will be completed by May 16th. The Commerce Department could decide against Auxin this month if it chooses to.
Auxin Solar must meet a "five-factor” burden to win its petition. Solar industry experts say it’s already clear Auxin would fail to meet these critical factors. For example, the Commerce Department has to find that these overseas operations are "minor” or "insignificant processing” functions. Even Auxin, in other solar trade cases, testified about the high-technology, long-term incentives needed, and major financial investments required to manufacture cells to scale in the US, describing them as "capital intensive and technologically sophisticated” -- not exactly "minor or insignificant.”
Bloomberg: The Life of a Solar Panel Installer, September 16, 2021.
CNBC: Making $100K A Year As A Solar Roof Installer In New Jersey | On The Job, November 30, 2021.
Bloomberg: Community Solar Is Bringing Renewable Energy to Everyone, Mar 23, 2021.