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Solar industry needs swift decision on looming tariffs

Witnessing a bipartisan effort in support of strengthening the solar industry is a rarity. If Congress can nudge the administration to act on its recommendation, Arizona stands to be one of the biggest beneficiaries.

It has been just a few weeks since the Department of Commerce initiated an investigation, requested by California-based solar panel manufacturer Auxin Solar, to consider potential tariffs on imports of crystalline silicon photovoltaic solar cells and modules (panels), the main components in solar installations on rooftops and buildings.

Joy Seitz

This equipment is imported into the United States from Cambodia, Malaysia, Thailand, and Vietnam.  Just the simple initiation of this investigation, which ultimately threatens to slap on tariffs between 50% to 250% for these imports, is actively stifling growth and impacting the supply chain for companies and consumers in all sectors of solar development, residential, commercial, and utility scale, especially here in Arizona.

The issue is so detrimental to the solar industry that Arizona’s Sen. Kyrsten Sinema has joined with a bipartisan group of U.S. senators to appeal to President Biden to urge his administration to immediately review the case and issue a preliminary determination quickly to mitigate further uncertainty and harm to this growing industry. Their letter also requests that the Biden administration reject the petitioner’s request for making the tariffs, should they be approved, retroactive, which would not only harm current and future customers, but previous ones as well.

For the past two decades the solar industry, especially here in Arizona, has been working on establishing a credible business sector with high-paying jobs, providing reliable clean energy, and advocating for policies that support the consistent deployment of solar across the state.

It is imperative that the Biden administration heed Senator Sinema and others, as this case has already stalled the deployment of 200MW of solar installation per week, enough to power 24,000 homes. It is also estimated that 75% of U.S. solar companies report being notified of canceled or delayed panel supply due to the looming tariffs policy. The Solar Energy Industries Association, America’s largest solar trade association, surveyed its members and the losses are already startling: nationally, 100,000 jobs could be lost, 318 utility-scale projects disrupted, 83% of respondents report their solar module supply is either canceled or delayed with approximately $52 billion dollars in utility-scale investments at risk.

This policy would be especially bad for Arizona’s solar industry, as 80% of U.S. solar panel imports come from Malaysia, Vietnam, Thailand, and Cambodia.  The solar industry in Arizona alone supports 296 companies, 57 manufacturers, and 138 licensed installers.  It is also important that the industry continues to grow to ensure Arizona’s energy grid is stable and able to expand with the state’s exploding population and do it without adding more carbon to the climate. Today, more than 9% of our state’s electricity is from solar, enough to power nearly 1 million homes. We want to build on that success with policies that encourage continued solar adoption.  Nationally, the solar industry is responsible for 70,000 American jobs and an additional 11,000 jobs in manufacturing.

While this threat has been damaging in the short term, there is hope that the Biden administration will do the right thing and support a decision that fosters continued growth in the solar industry. The solar industry needs a negative determination on the Commerce Department’s investigation to consider tariffs as soon as possible to regain certainty in the market. Such a decision would be good for the country, and excellent for all Arizonans, a majority of whom support a thriving, stable, and clean energy grid.

I hope the same will be true of Arizona’s state and local governments, as better energy policy can mitigate investment risks for solar project deployments, which in turn will help utilities keep energy costs lower and maintain their commitments to reducing fossil fuel dependency to help transition to a clean energy future.  Good policy can be a bridge for the expansion of our domestic solar manufacturing capacity, and when that day comes Arizona is well-positioned to be a leader in this regard.

Joy Seitz is president & CEO of Phoenix-based American Solar & Roofing and a board member of the Solar Energy Industries Association.

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