US Imposes Duties on Solar Panels From Southeast Asia

(Bloomberg) -- The US Commerce Department set preliminary duties on solar imports from Southeast Asia, after an initial finding the equipment is benefiting from illegal government aid. 

The determination marks an early victory for domestic panel makers who say cheap imports are harming their operations and threatening investments meant to cultivate a US solar supply chain. They asked the government to impose the duties, arguing the equipment benefits from unfair foreign subsidies and is being sold at prices below the cost of production.

The targeted nations provide the bulk of US solar cell and module imports, and the swift imposition of countervailing duties means renewable developers will face higher prices for that equipment right away. For many imports from Thailand and Vietnam, rates will apply retroactively, going back 90 days to early July. 

The case marks only the latest bid by US manufacturers to confront overseas rivals, beginning with similar duties on solar imports from China roughly 12 years ago. Chinese manufacturers responded by setting up operations in other Asian nations that weren’t affected by the tariffs. 

Companies pursuing the latest claims as part of the American Alliance for Solar Manufacturing Trade Committee include First Solar Inc., Hanwha Qcells USA Inc., and Mission Solar Energy LLC.

Chinese officials have argued new tariffs threaten to slow the speed of the US energy transition and its fight against climate change. The case has drawn opposition from some foreign manufacturers and domestic renewable power developers who argue tariffs could give an unfair advantage to larger incumbent US manufacturers while raising the cost of solar power projects.

“We need effective solutions that support US solar manufacturers and, at the same time, help us deploy clean energy at the scale and the speed we need to tackle climate change and serve growing electricity demand here in the US,” said Abigail Ross Hopper, president of the Solar Energy Industries Association. “While we recognize the challenging market landscape for domestic manufacturers in the short term, these cases alone will not solve for our macro challenges.”

The investigation is set to reach into next spring — and final rates could be raised, lowered or jettisoned altogether based on the results of the probe. 

Under Tuesday’s action, preliminary general rates for companies not specified by Commerce are 8.25% for Cambodia; 9.13% for Malaysia; 23.06% for Thailand; and 2.85% for Vietnam. Company-specific rates include 14.72% for imports from Hanwha Q Cells Malaysia Sdn. Bhd.; 3.47% for imports from certain JinkoSolar Holding Co. Ltd entities in Malaysia; 0.14% for Trina Solar Science & Technology (Thailand) Ltd; and 2.85% for certain JA Solar Technology Co. entities in Vietnam.  

The preliminary rates generally were lower than anticipated, analysts said. However, final rates likely are to be higher than initially assessed, as in past solar trade cases, and Commerce has only recently begun probing several newly lodged subsidy allegations, said Tim Brightbill, partner at Wiley Rein LLP and lead counsel to the petitioners.

“We’re confident that by the final determination there will be significant subsidies, not only on all four countries, but on the major Chinese producers,” Brightbill said. “Many of these companies are adept at hiding their subsidies and where they’re coming from.”

For the largest importers such as Trina and JA, the preliminary rates were “so low as to be meaningless,” KeyBanc Capital Markets said in a research note. The outcome could further weigh on shares of First Solar, because it has been a prime potential beneficiary, but should be “supportive of the downstream solar industry,” KeyBanc said.

The Commerce Department preliminarily agreed with the manufacturers alliance that climbing imports in recent months constitute “critical circumstances” — a benchmark under trade law — and warrant retroactive duties for imports from Vietnam and Thailand dating back to July 2. Under the initial finding, that retroactive duty collection doesn’t apply to equipment from Trina Solar Science & Technology (Thailand) Ltd. and imported solar cells from Boviet Solar Technology Co., Ltd. in Vietnam and JA Solar Vietnam Company Limited.

The Commerce Department is still conducting its initial investigation into claims solar imports from the targeted countries are being dumped in the US and sold below the cost of production; it is expected to reveal a preliminary finding in that case in November.

Listen on Zero: Making Solar Panels Is 'Horrible' Business. The US Still Wants It.

(Updates with Commerce finding triggering retroactive duties from third paragraph.)

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