Saturday Feb 04, 2023

Update: Policies at Cross-Purposes: U.S. Trade Policy Creates Cloudy Picture for Rapid Deployment of Solar Energy – JD Supra


The Biden administration has made the deployment of solar energy a key component of its plans to battle climate change. From utilities to investors to installers, deploying solar energy at such a broad scale presents a number of new and exciting growth opportunities for companies and associations operating across numerous industries. Yet seizing on these opportunities also requires navigating potential risks. In particular, elements of U.S. trade policy potentially work at cross-purposes with the administration’s efforts to encourage the rapid deployment of solar energy.

Currently, virtually all solar cells (the key components of solar modules) and most solar modules (also commonly referred to as panels) installed in the United States are imported. The United States currently does not produce any meaningful quantities of cells, and U.S. module capacity is sufficient to supply only about a third of U.S. demand. Although the administration and Congress have been considering ways to incentivize U.S. solar cell and module manufacturing, for at least the immediate future, the broader solar industry will be heavily reliant on imports to meet demand and to meet the administration’s clean energy goals.

Several kinds of tariffs potentially apply to imports of solar cells and modules, and importers of these products must also be cognizant of and comply with statutory and regulatory provisions prohibiting the importation of merchandise made in whole or in part with forced labor. In this post, we provide an overview of the trade regulatory landscape affecting imports of solar cells and modules, summarizing the main tariffs on solar cells and modules as well as trade issues regarding forced labor concerns in China affecting imports of these products.

I. Tariff Environment for Solar Cells and Modules

The normal duty rate, or taxes imposed upon importation, for solar cells and modules is zero for imports from nearly all countries. However, a number of special tariffs apply to imports of certain solar cells and modules. This is especially true for imports from China, which is the largest global producer of solar cells and modules. Chinese products are subject to a number of overlapping and cumulative special tariffs. We summarize the special tariffs applicable to solar cells and modules below.

A. Antidumping and Countervailing Duty Orders on CSPV Cells and Modules

There currently are three sets of antidumping (AD) and countervailing duty (CVD) orders on crystalline silicon photovoltaic (CSPV) products. CSPV products are the predominant type of solar cells and modules globally. Application of these duties depend on where the CSPV products are produced. The CSPV AD and CVD orders do not apply to thin-film products.

i. CSPV Cells, Whether or Not Assembled into Modules, from China (Solar I)

The U.S. Department of Commerce (“Commerce”), the agency responsible for calculating the level of AD and CVD tariffs imposed, issued AD and CVD orders on CSPV cells, whether or not assembled into modules, from China in 2012.1 These orders are often referred to as the “Solar I” orders, as they were the first set of AD and CVD orders. These orders apply to CSPV products if the cell was produced in China. This means that solar modules produced in a third country with a Chinese-origin cell are subject to the orders.

The Solar I AD and CVD rates (or tariffs) vary by supplier. Current AD rates range from zero to nearly 240 percent, while current CVD rates range from roughly three percent to more than 525 percent. AD and CVD rates are cumulative, meaning that importers …….


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