As the two-year tariff holiday on solar panels from Southeast Asia draws to a close on Thursday, American project developers are confronted with a pressing deadline to deploy the substantial volume of equipment they accumulated duty-free over that period.
The expiration of the tariff suspension could trigger a surge in U.S. solar installations, while simultaneously raising concerns within the domestic manufacturing sector, eager to see a transition to American-made products.
According to energy advisory firm Clean Energy Associates, U.S. solar developers have amassed approximately 35 gigawatts (GW) of imported panels in warehouses since President Joe Biden lifted the duties on countries including Malaysia, Thailand, Cambodia, and Vietnam in 2022, aiming to expedite domestic projects to combat climate change.
This stockpile of panels almost matches the solar capacity projected for installation throughout the entirety of 2024, as per research firm Wood Mackenzie.
Stacy Ettinger, Senior Vice President of Supply Chain and Trade for the Solar Energy Industries Association (SEIA), remarked on the effectiveness of the temporary tariff moratorium, stating, “The temporary tariff moratorium did its job to ensure a sufficient supply of solar modules to support the need for increased clean energy deployment.”
However, Tim Brightbill, a trade attorney with Wiley Rein representing U.S. solar manufacturers seeking new tariffs on Southeast Asian imports, voiced concerns over the impending deadline, highlighting the challenges posed by the surge in inventory. “The tariff moratorium led to this surge and glut of inventories that we're seeing today, that has also contributed to the 50% price collapse in the market that is harming the U.S. industry,” Brightbill emphasized.
The situation reflects a turnaround for the U.S. solar industry, which, until recently, grappled with supply constraints amid the pandemic and apprehensions regarding solar equipment associated with forced labor.
While solar imports surged since the beginning of 2023, with a nearly 14% increase in the first quarter of this year, the majority originated from the targeted Southeast Asian countries. The tariffs aim to counter imports from companies evading U.S. duties on Chinese goods by completing panels in these nations.
The White House has pledged to enforce the 180-day deadline vigorously to deter stockpiling, with SEIA expressing concerns over project costs and the nation's climate change efforts. However, SEIA did not advocate for an extension of the tariff holiday.
