Section 201 of the Trade Act that targets imported solar products has been added with variables, which is a devastating news to solar developers. POTUS Donald Trump had recently signed a presidential proclamation, which cancels the previous exemption of duty on partial solar products. He is also hoping to elevate the tax rate of section 201 of the Trade Act by increasing the rate from 15% to 18% in 2021.
The US initiated the 4-year section 201 in January 2018, which imposes a heavy duty of 30% on imported solar cells and modules that are over 2.5GW in capacity, with 5% reduction each year, and is expected to lower to 15% by 2021, followed by its exit in February 2022. Trump pointed out that the US domestic production capacity of solar cells has been improved subsequent to the imposition of the solar duty in January 2018, and the market ratio has escalated at the same time, though further measures must be implemented.
Hence, Trump decided to amplify the tax rate for 2021, and had once again mentioned bifacial solar. He specified that it is necessary to revoke the exemption of duty on bifacial solar and retain the specific item in the tariff life as there is an increasing number of competitive products, and that it is essential to increase the duty to 18% on the 4th year.
Trump believes that it is crucial to avoid an exemption of duty on bifacial solar panels, otherwise it will reduce and restrict the effectiveness of the overall measure. He also hopes that the US Trade Representative (USTR) is able to commence an investigation and see if there is a need for further actions in order to protect the interests of the US from severe damages. Since the US officially announced in June 2019 that flexible, glass fiber, and distinctive colored solar panels and bifacial solar cells are exempted of duty, the ratio of imported solar from China started to increase from the second half of the same year, with 95% Chinese made products entering the country during that period.
A bifacial solar panel is a module that is equipped with solar cells on both sides, and generates power from both sides as well. Despite its higher price, a bifacial solar panel is able to generate 20-30% more power than traditional single-sided solar panels, and is expected to maximize land utilization and the efficiency of power generation for floating solar, as well as areas with restricted space or prone to snowing.
The Checkered Bifacial Solar
However, the announcement regarding the exemption of duty on bifacial solar during June 2019 did not end there, and has been stuck in a loop ever since. The USTR proposed in October 2019 that the exemption of duty will elevate the import of solar, which creates competition with US made products, thus resuming the duty on October 28th 2019. By the end of the year, US solar developers including Invenergy Renewables were engaged in a lawsuit, and the involvement of the US Court of International Trade (CIT) had temporarily granted an exemption of duty, though such sweet dream had been short lived, as the exemption was cancelled by the USTR in April 2020, followed by tax imposition starting from May 18th 2020. The latest progress is that the CIT has ruled that bifacial solar panels will receive exemption of duty, and this loop seems to have become a reoccurring scene.
Bifacial solar currently occupies less than 3% of market share in the US, and is categorized as a niche product, though the reduction of cost for solar has prompted an increasing emphasis for bifacial solar due to its extensive application and vast benefits.
As the importance of renewable energy, such as solar and wind power, increases in the field of power supply, each country is starting to value a comprehensive supply chain of local industries, and is gradually transforming the initial single supply chain to a multidimensional supply chain. However, as pointed out by the coverage of foreign media, developers (consumers) and importers are have issues with the elevated duty, who believe that such measure will increase cost, and that local US manufacturers will not be impacted by imports since they were never producing solar modules in the first place.
US solar manufacturers commented that a higher duty is able to provide guarantees for local manufacturers.
(Cover photo source: pixabay)