WW0 Investigates: Secretary of Commerce Makes Inaccurate Statements About Solar Tariffs in Senate Testimony
In a recent appearance before a Senate subcommittee, Commerce Secretary Gina Raimondo downplayed bipartisan concerns about the potential tariff hikes for solar due to a controversial investigation, petitioned by Auxin Solar. Some on the subcommittee expressed concern that the tariffs could reach as high as 250%, hitting the Southeast Asian leg of the industry’s supply chain, which provides more than 80% of the most common modules used by American solar companies. Chinese solar has been facing steep tariffs since 2012, and records in the Federal Register from 2017 to 2018 show its biggest manufacturers were between seeing tariffs of 92.5% and 100.79%. Still, Raimondo assured that these tariffs would likely be around 10-12%.
Forbes: Commerce Sec. Gina Raimondo Testifies Before Senate Appropriations Committee, May 11, 2022.
We ask, were Raimondo’s statements accurate?
This time, the Secretary also made inaccurate statements.
- She alleged that the “five criteria” test for circumvention had been met when the Commerce Department initiated its investigation. That is incorrect. The bar for initiation is actually very low. Auxin did not have to meet that "five criteria" standard; Auxin only had to allege that an investigation would show that the "five criteria" had been met. The entire purpose of the investigation is for Commerce to determine whether the “five criteria” test is met.
- The Secretary also referred to her staff as acting in a “quasi-judicial” capacity, “sitting as judges.” This is inaccurate. No one at the Commerce Department has any judicial role. No such role is referenced anywhere in the statute governing circumvention cases. The Commerce Department is not an independent regulatory body. It answers to Congress and the President of the United States. It has wide discretion to act on the facts, and is not beholden to a trumped-up political process by a single company representing less than 3% of the US module market, without the support of a single other domestic manufacturing company, to manipulate US trade laws to gain a competitive advantage.
- The Secretary stated that the likelihood that assessed tariff rates would be in the 200% range was “exceedingly unlikely” and that, over the past 10 years of solar tariffs on China, most rates have been in the range of 10-12% or at least less than 20%. There are two problems with this statement. Antidumping rates have run between 0% and 95% over the last 10 years and often bounced wildly from year to year, so companies cannot plan their business around such volatility. Second, the actual tariff rate for solar panels from China is the sum of two rates -- the antidumping tariff which the Secretary misrepresented, and the countervailing duty tariff which usually runs about 20% each year and is additive to the antidumping tariff.
Why This Matters
Solar energy is vital to energizing a net-zero future and a green economy. The IEA has shown that renewables “are set to account for almost 95% of the increase in global power capacity through 2026, with solar PV alone providing more than half.” But the IEA also predicts renewable power growth will slow in 2023. Imposing tariffs on the modules used by a vast majority of the US solar industry would be damaging to the industry. Already, 300 large-scale projects have been stalled or canceled due to uncertainty caused by this investigation.
CNBC: US is 30 years behind on renewable energy investments, says former Rep. Donna Edwards, May 10, 2022.
An Uncertain Future
This investigation has set a dire forecast for solar energy. According to the Solar Energy Industries Association (SEIA), the deployment of new solar faces cuts of 46% and 100,000 domestic jobs are at risk. The math is simple: domestic gas and oil extraction provide approximately 127,000 part- and full-time jobs. With the US looking to make a clean-energy transition, those solar jobs hold immense value to those working in the energy sector, as well as the country’s future as a whole.
SEIA President Abigail Ross Hopper said: “If you buy a solar panel today from one of the four affected countries, you may not know how much you owe in tariffs until months, or even years, from now. Why would any reasonable business buy solar panels in such a risky and uncertain business environment?”
Clean Capital: Department of Commerce Tariff | What it Means for Solar & Storage Developers (Webinar), April 27, 2022.
Bloomberg: Social Capital-Backed Startup Scales Residential Solar, May 10, 2022.
WW0: Heather Zichal and Amanda Little Facebook Live conversation, February 18, 2021.