Tuesday Dec 06, 2022

Solar’s Uncertain Future: Auxin Solar Petition Disrupts Industry – JD Supra

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The Biden-Harris administration and US Department of Commerce (Commerce) are investigating solar cell parts from four Southeast Asian countries—Cambodia, Malaysia, Thailand, and Vietnam—to determine if the manufacturers are using parts made in China. If those countries are using solar parts made in China without significantly altering them, it signifies that those companies are circumventing antidumping duty (AD) and countervailing duty (CVD) tariffs.

Given that 85% of imported solar products come from these countries, developers are now facing challenges in finding alternative sources of supply domestically or abroad. Many suppliers in the named countries have completely halted shipments to the United States unless the buyers will accept the market risk of increased AD/CVD duties, which means that current-year solar projects will likely face delays and potential cost increases in reaching operation. Further, lengthy delays are producing a significant impact on the US solar market.

US 2012 ANTIDUMPING AND COUNTERVAILING DUTIES

The Auxin Solar case is based on AD and CVD orders currently imposed on solar cells imported into the United States from the People’s Republic of China (China). These AD/CVD orders derived from 2012 Commerce investigations that determined that Chinese producers and exporters sold solar cells in the United States at dumping margins ranging from 18.32% to 249.96%, while also receiving countervailable subsidies of 14.78% to 15.97%.

Commerce’s determination resulted in the Antidumping Duty Order (77 Fed. Reg. 73018) and Countervailing Duty Order (77 Fed. Reg. 73017), which cover crystalline silicon photovoltaic (CSPV) cells, and modules, laminates, and panels consisting of CSPV cells, whether or not they are partially or fully assembled into other products, including, but not limited to, modules, laminates, panels and building integrated materials from China. After the orders were imposed, the supply of solar cells and modules substantially moved from China to the four countries currently under Commerce investigation: Cambodia, Malaysia, Thailand, and Vietnam.

2022 AUXIN SOLAR PETITION AND INVESTIGATION

On February 8, 2022, Auxin Solar, a US solar panel manufacturer, submitted a request for circumvention inquiry to Commerce alleging that manufacturers in Cambodia, Malaysia, Thailand, and Vietnam are circumventing the 2012 orders on Chinese solar cells and modules. Auxin’s petition generally alleges that each of the named countries leverages the Chinese supply chain to supply polysilicon ingots or wafers to its minor assembly operations and then imports the assembled panels to the United States.

Commerce initiated a notice on April 1, 2022, that it will be opening a country-wide circumvention inquiry investigation to determine whether imports of CSPV cells, whether or not assembled into modules (solar cells and modules), completed in Cambodia, Malaysia, Thailand, or Vietnam using parts and components from China are circumventing the AD and CVD orders on solar cells and modules from China.

To solicit information for the inquiry, Commerce has issued, and will continue to issue, questionnaires to companies in Cambodia, Malaysia, Thailand, and Vietnam concerning their shipments of solar cells and modules to the United States and the origin of inputs that they used to produce the solar cells and modules.

Opponents argue that there is no evidence of circumvention because Commerce rules specify that country of origin is based on the location of manufacture of the CSPV cell, specifically the location of the formation of the P/N junction. The solar industry has reoriented its supply chain and manufacturing operations over the last 10 years. During this time, solar cells or modules imported into the United States (now totaling $6 billion annually from the four countries under investigation) have not been subject to AD/CVD, …….

Source: https://www.jdsupra.com/legalnews/solar-s-uncertain-future-auxin-solar-7954276/

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