Various news outlets such as Associated Press and Solar Power World have reported that the US Department of Commerce has formally launched an anti-dumping investigation on PV products shipped from four Southeast Asian countries. The department is responding to a petition from a domestic PV module manufacturer Auxin Solar that accuses Chinese manufacturers for PV cells and modules of evading the existing anti-dumping and countervailing duties by setting up shops in Southeast Asia. Countries that are being investigated include Cambodia, Malaysia, Thailand, and Vietnam. The department made the announcement on March 25. The investigation is expected to take about a year to complete.
US Government Maintains Barriers against Chinese PV Imports
In the American PV industry, a group of manufacturers supports high tariffs on PV products made by Chinese companies. However, another group of companies that are represented by the Solar Energy Industries Association (SEIA) opposes this policy. In November last year, the US Department of Commerce rejected a request from the American Solar Manufacturers against Chinese Circumvention (A-SMACC) to investigate exports of cells and modules from Southeast Asia. The reason for rejecting the request from A-SMACC was that the organization did not reveal its members. Also in the same month, the US Court of International Trade ruled to exempt imported bifacial PV modules from the Section 201 tariffs and restore the related tariff rate for the year to the originally designated 15%. Nevertheless, this particular penalty has been extended by four more years.
Apparently, the department has reversed its position on investigating Southeast Asian countries after receiving the petition from Auxin this February. According to a recent memo publicized by the department, Auxin listed several Southeast Asian subsidiaries of the major Chinese manufacturers. The company said that it is unable to compete against the extremely low prices of imports from the subsidiaries.
PV Projects in the US Face Uncertainties as Non-Stop Petitions and Accusations Cause Government to Waver in Its Policy on Solar Energy
On the surface, the intra-industry conflict over the continuation of tariffs on Chinese imports pits American manufacturers for c-Si and thin-film products against solar energy advocates and utility-scale installers. First Solar, which is an American company that develops and promotes thin-film products, has been publicly pressuring the US government to punish Chinese manufacturers for their circumvention attempts while dangling the prospect of expanding its production capacity in the home country.
Auxin pointed out that Southeast Asian subsidiaries of the vertically integrated Chinese manufacturers are being subsidized by their parent companies with respect to the provisioning of production-related materials and components such as wafers, silver paste, module frames, junction boxes, etc. Additionally, Auxin in its petition cited a BloombergNEF report stating that 70% of the actual value of PV products imported from Southeast Asia goes to China.
Besides Chinese manufacturers and their subsidiaries, other foreign manufacturers such as Hanwha Q Cells (South Korea) and Maxeon (Singapore) have also set up cell and module factories in Southeast Asia. In its successful petition to have the Department of Commerce exempt bifacial modules from the Section 201 tariffs, SEIA noted that Malaysia, Vietnam, and Thailand together account for around 80% of the PV modules imported to the US.
As for this latest investigation, SEIA said that Auxin’s “frivolous, self-interested petition could derail the entire American solar energy industry and disable efforts to tackle the climate crisis”. The industry association argued that project developers have to plan their procurement activities very early on, and the previous petition from A-SMACC has already caused considerable impact on their schedules. Furthermore, low prices of c-Si PV products are essential in making projects profitable. Given the current economic situation, there is a strong risk that higher tariffs could lead to delays and cancellations for many projects.
Since the anti-dumping and countervailing duties on imports from Southeast Asia have the potential to massively increase the cost of project development, SEIA will be launching a lobbying campaign to fight such measure. Commenting on the investigation, Heather Zichal, CEO of American Clean Power Association said that the Commerce Department’s decision to go ahead with the investigation is a “disaster” and “signals that the Biden administration’s talk of supporting solar energy is empty rhetoric”. Abigail Ross Hopper, CEO of SEIA, estimates that tariffs on imported PV products from Southeast Asia could be in the range of 50-250%. Turning to Auxin, its CEO Mamun Rashid said in an email that his company is grateful for the decision taken by the department.
The department will issue its preliminary findings in 150 days of investigation. It will make its final decision in 300 days and allow an additional 65 days for further consideration. According to an article from Reuters, the US Department of Energy released a memo last year stating that the share of solar energy in the country’s electricity supply could grow from 3% at that time to about 40% in 2035. The Biden Administration is also aiming to have the domestic power industry make a full transition away from fossil fuels by 2035.