One of the reasons why the solar industry is dubbed the “solar coaster” is due to trade policies. Governments all around the world employ a range of techniques to offer their domestic companies a competitive advantage in the global market.
Other countries may see such measures as unjust, prompting retaliation measures. However, trade rules have ramifications for all parties involved, whether good or bad, as illustrated by recent solar sector news.
If you’ve been following the headlines in recent months, you’re aware of the current US anti-dumping investigations, which have ordered the DOC to investigate solar module imports from various Chinese companies.
Late last month, the Biden Administration released a 24-month tariff exemption on the components under consideration. The moratorium does not end the DOC investigation, and taxes on Chinese imports remain in effect.
The DOC investigation into Southeast Asian countries is predicated on the notion that Chinese panel manufacturers dodge US tariffs by transporting solar panel materials through these countries. Even though the DOC has yet to announce a conclusion, the investigation has had a substantial influence on the US solar market.
According to SEIA, as of April 26th, 83 percent of 700 solar companies questioned acknowledged cancellations or disruptions in their unit supply agreements. SEIA also disclosed 318 utility-scale developments that were delayed or canceled.
These developments come up to about six gigawatt-hours of attached battery storage and 51 gigawatts of solar capacity. The SEIA believes that these results only represent a fraction of the actual impact on solar companies.
Meanwhile, the solar industry mulls over the moratorium’s implications and what else needs to be done to create an ecosystem that favors domestic manufacturers.
The endeavor to build a local supply chain for solar modules is motivated by a desire to lessen dependency on China and position the US as a quick responder to expanding demand.
The Department of Commerce is exploring new tariffs in addition to existing taxes. Tariffs are one weapon that governments can use to level the playing field for domestic firms battling against international competition.
Other economists, however, believe that tariffs alone will not be enough to support domestic manufacturing. As a result, they should be paired with other stimuli such as subsidies.