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Op-ed: How to save the solar industry from disastrous tariffs

The U.S. solar industry needs to break its addiction to Chinese modules, but tariffs aren't the answer, writes the president of Green Lantern Solar.

Contributed by Scott Buckley, President of Green Lantern Solar

I’m sympathetic to U.S. solar module manufacturers who are tired of competing against unfairly subsidized Chinese panels. The fact that the Chinese government supports their module manufacturing with enormous governmental investments while our own manufacturers have to beg and plead with their own government for help must be maddening.

But the new tariffs being investigated by the Biden administration on other Asian countries are not the answer. In fact, instead of imposing new tariffs, the administration should be hard at work revitalizing the supply chain, particularly in light of the $33 billion of private investment the solar industry injected into the economy last year and the more than 230,000 jobs it supports.

The most recent call for tariffs comes from Auxin Solar, a U.S. module manufacturer claiming certain countries are essentially layovers for Chinese solar products headed to the United States. The U.S. Department of Commerce, as required by federal statute, took up an investigation, and the mere fact that an investigation has been launched is already having demoralizing and destructive effects on the industry as a whole.

The Solar Energy Industries Association (SEIA) put together a survey of its members and the larger industry to find out how the investigation is affecting their businesses, and the feedback they’ve received is nothing short of breathtaking. With 412 companies responding (at press time), 78% of the companies say the module shipments they need for their existing projects have been significantly delayed or canceled outright. In fact, 56% of survey respondents report that at least 70% or more of their 2022 solar pipeline is at risk. More than 80% of the domestic manufacturers that took part said this case would have a devastating or severe effect on their ability to operate, which would slam the brakes on one of the fastest-growing segments of the U.S. economy.

Worse, two-thirds of companies say they may have to lay off nearly 70% of the workforce due to this investigation, while the final third told SEIA that they might have to close down completely. And remember, these results are occurring before the tariffs are implemented. I can’t imagine what the solar landscape will look like if the Commerce Department decides to go forward with the proposal in August. It’ll look like a moonscape, only with fewer jobs.

So here’s my modest proposal, designed to provide the necessary support for domestic solar module manufacturers without cutting off the current supply. The solar industry should take a play from “little chip” manufacturers (little companies like Intel) and apply it to “big chip” manufacturers because what is a solar panel other than a big silicon microchip? (Well, they’re not directly analogous, of course, but they’re both high technology variations on silicon )

Under a program called Creating Helpful Incentives to Produce Semiconductors (CHIPS), the U.S. government would provide $52 billion in subsidies to domestic semiconductor makers. Change “Semiconductors” to “Solar,” and now you’re on to something.  What could the solar industry do with $52 billion to support module production in this country? I’ll tell you what: We could make a lot of cells.

Fortunately, we are not passive actors in this unfolding drama. We can let our voices be heard in the halls of Congress and the White House. We can educate them about the devastating effects these tariffs would have on the solar industry and its workers—but we can also offer them a viable alternative to the tariffs. They wouldn’t even have to reinvent the wheel. They’d just have to look at the CHIPS Act and adjust it to support solar module manufacturers instead – outside of the Build Back Better framework.

We have a strong advocate in Washington in SEIA, but solely focusing on stopping the tariffs isn’t enough. We have to provide an alternative to support our domestic module manufacturers long-term and break our Chinese module addiction while keeping a sufficient flow of panels in the near term to keep the thriving industry alive. Creating a CHIPS program for solar could be the solution that makes everyone happy.

About the author

Scott Buckley is President of Green Lantern Solar, a Vermont-based specialized commercial and community solar developer leveraging its financing and project expertise to deliver a clean energy future.

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