On Monday, June 6, the Biden Administration announced a two-year pause on new solar tariffs for the solar industry amidst a rise in demand for energy. With United States solar developers dependent on imported solar panels and parts, this shift will positively impact domestic developers while negatively impacting domestic manufacturing.
Why was the solar tariff paused?
The solar tariff was paused due to the Commerce Department deciding to investigate if Chinese solar manufacturers illegally avoided solar tariffs by routing operations through Southeast Asia. If the investigation reveals that tariffs were actively avoided, levies could be imposed on imports from such Southeast Asian countries. However, with the tariff “pause” in place, levies could not be enacted for the next two years.
Recently in 2020, 89 percent of solar modules utilized in the United States were imported– the majority of the shipments coming from Southeast Asia.
Many domestic companies rely on imported products as prioritization on transitioning to solar energy grows. Companies within this market complain that the Commerce Department’s investigation has fostered unpredictability in the future pricing within the solar market, which slows the rate of transition to renewable energy.
How will this solar tariff pause impact the solar industry?
Alongside the two-year pause on new solar tariffs, the White House will release plans to increase domestic solar manufacturing capacity to three times the capacity when President Biden took office– over 22 gigawatts by 2024.
While the United States government works to balance competing interests of boosting domestic manufacturing and accelerating transitions to clean renewable energy, tariff issues have caused a rift in the solar industry. Solar installers who buy imported panels and United States manufacturers who want protection from greatly reduced prices must compete for prominence in the industry without direct government backing.
Read: How Much is the Federal Solar Tax Credit in 2022?
On June 6, White House officials said that President Biden would enact a suite of directives with the intention to increase the domestic development of low-emission energy technology. This action matches Mr. Biden’s desire to ease the exchange between domestic solar suppliers and the federal government.
Want to take advantage of the solar tariff pause?
With the federal pause on the import tariff for solar panels and the growing domestic market for the solar industry, now is the perfect time to launch a solar energy system. Partnering with Energylink can expedite and simplify the process, as we design, build and fund energy solution projects. Get started by clicking the button below for a free quote.
Questions? Speak with a member of our team directly at (866) 218-0830.