By Steve Miller, RealClearInvestigations
May 25, 2022
Publicly, big solar developers and many climate change activists are sounding the alarm about an ongoing probe of trade abuses by Chinese manufacturers.
Abigail Ross Hopper, CEO of the Solar Energy Industries Association, last month described the U.S. Department of Commerce investigation as “the most serious crisis we have faced in our collective history.”
Heather Zichal, a former White House energy adviser under President Barack Obama, said the examination of China’s trade practices “drives a stake through the heart of planned solar projects.”
The New York Times reported last month that the “solar industry is ‘frozen’ as Biden administration investigates China” over allegations solar producers there are offshoring work to avoid tariffs.
But CEOs of some of the biggest solar players in the U.S. tell a different story to investors and followers, according to a RealClearInvestigations review of earnings call transcripts and solar project plans.
Amazon last month announced 37 new solar projects around the world, including in the U.S., while power plant developer Seaboard Solar announced it is working on multiple projects in New York state. A $75 million project is moving ahead in Minnesota, while two plants by Dominion Energy are starting construction in Virginia this year.
Kirk Crews, CFO of NextEra Energy, which trumpets itself as the world’s largest producer of wind and solar energy, told Bloomberg that if the investigation found that China circumvented tariffs by offshoring, “it would be unwinding a decade of trade practice.”
But Crews told analysts in an April investor call that despite the federal investigation, “we remain comfortable with our current development expectations for wind, solar and storage.”
Several other major solar producers also have announced they are moving ahead on projects this year, including Duke Energy and SOLV Energy.
“Even with trade cases, solar demand has continued to grow — Solar jobs are still expanding,” said Tim Brightbill, a Washington, D.C.-based lawyer for domestic solar producers whose complaint last year also alleged China was avoiding tariffs.
The disconnect between public and private words and deeds illustrates a solar industry that presents itself as on a progressive mission to save the planet actually behaving more like a traditional big business. It is managing expectations in the political and business arenas through messaging geared to those separate audiences. Behind the words is a highly competitive business focused on keeping costs low — even if that means sourcing cheaper materials from Chinese companies, some of which are accused of relying on highly polluting coal power, using slave labor, or violating trade agreements.
The Commerce Department launched its probe in response to a petition filed in February by a U.S. competitor to Chinese producers, Auxin Solar, a small California-based solar parts maker, which alleged that China was avoiding tariffs by routing its production through four Southeast Asian countries.
Auxin alleges that manufacturers in those four countries – Thailand, Vietnam, Malaysia, and Cambodia – are Chinese enterprises that use the factories for panel assembly, the last step before shipment and installation. Plants in those countries “use affiliated Chinese input suppliers and a fully integrated Chinese supply chain to circumvent the existing [tariffs],” according to Auxin’s complaint.
The complaint maps the alleged movement of solar parts to the four countries from China, as direct imports of Chinese solar parts to the U.S. have dipped over the last three years while increasing from the four Southeast …….