Lawmakers battle over Commerce tariff probe into solar panel parts

Lawmakers are battling over a Commerce Department investigation into solar panel imports that could lead to heavy tariffs on Chinese imports that are critical to the solar panel industry.

The issue is not a partisan one: Democrats and Republicans stand on both sides of the issue, with one bipartisan group arguing the investigation itself and the tariffs that could eventually come would devastate the solar sector.

In an interview with The Hill, Sen. Jacky Rosen (D-Nev.) said that both the investigation and the tariffs themselves are “causing massive disruption” in the solar industry, particularly Nevada, which has the most per capita solar jobs of any state.    

“We are only able to supply about 15 percent domestically of the demand for solar panels. So we don’t have the capacity here right now to fulfill all the orders there are and even finish the projects that are already bid out,” Rosen said.    

Other Republicans and Democrats say Commerce was right to launch the investigation to protect U.S. jobs and prevent Chinese companies from circumventing existing laws meant to prevent the dumping of cheap products.

“A strong commitment to American manufacturing must be paired with proper trade enforcement so that investments in American production, workers, and innovation are not undermined by unfair trade practices,” Sens. Sherrod Brown (D) and Rob Portman (R) wrote in a letter to Commerce Secretary Gina Raimondo in March asking that the petition for the investigation be accepted.

Brown and Portman framed the investigation in terms of American jobs at stake, writing, “if legitimate circumvention allegations go unaddressed, entire domestic industries and thousands of American manufacturing jobs are at risk.” 

Commerce accepted the petition from Auxin Solar, a San Jose, Calif.-based solar company, in March. It is investigating whether several solar panel part companies in Southeast Asia are using those companies as fronts to circumvent U.S. tariffs in place on Chinese companies.

The department had previously rejected a similar petition from the trade group American Solar Manufacturers Against Chinese Circumvention.    

Rosen has been joined by a group that includes Sens. Thom Tillis (R-N.C.), Tom Carper (D-Del.), Jerry Moran (R-Kan.), Catherine Cortez Masto (D-Nev.), Brian Schatz (D-Hawaii), Sheldon Whitehouse (D-R.I.), Tim Kaine (D-Va.) and Michael Bennet (D-Colo.) in opposing the probe.     

There have been no findings yet, but the Solar Energy Industries Association (SEIA), a trade group that represents solar power companies throughout the supply chain, has warned that the mere existence of the investigation could have profound negative consequences for the industry. In April, the group cut its projections of U.S. solar installation by 46 percent.    

“While our hope and our expectation is that there will be a negative determination [and] there will not be tariffs imposed on panels … this action by the federal government has evidence of real policy uncertainty in the United States,” SEIA President Abigail Ross Hopper told The Hill.

Auxin, founded in 2008, claims it produces about 150 megawatts of solar panels per year, a minuscule amount compared to the Chinese companies whose exports provide most U.S. solar power. Those firms have capacity of 5 to 50 gigawatts.  

Critics of the SEIA trade group say it includes as members several Chinese firms that are already subject to tariffs for breaking U.S. laws. Those companies are now being accused by Auxin of circumventing those tariffs by producing panels in other countries in Southeast Asia.

“If you take a close look at SEIA and [the American Clean Power Association], they have Chinese companies as members and they’re funded by them,” said Nick Iacovella of the bipartisan trade reform organization the Coalition for a Prosperous America.    

These members include U.S. subsidiaries of Chinese companies Jinko Solar, JA Solar and Trina Solar, as well as Hanwha Q Cells, which is headquartered in Korea but bases its manufacturing in China.     

“SEIA is working night and day to discredit and undermine this investigation, because the Commerce Department is looking at their companies, their members,” Iacovella said. “I don’t know how much more clear-cut it gets. Everybody should be questioning their motives here.”    

Lawmakers in both parties have also accused the companies in question of profiting from forced labor of Uyghur ethnic minorities in Xinjiang, China. Sens. Marco Rubio (R-Fla.) and Jeff Merkley (D-Ore.) noted in a March 2021 letter that Jinko and JA have “publicly indicated that they source polysilicon,” a major component in solar panel manufacturing, from Xinjiang. Iacovella is a former Rubio staffer. 

Dan Whitten, SEIA’s vice president of public affairs, disputed the characterization in an email to The Hill.  

“The allegations of Chinese influence on SEIA are absurd and patently false. Out of SEIA’s 60 board companies, all have U.S. operations and one company has a headquarters in China. Like every board member, they have one vote.”  

“SEIA represents the American solar and storage industries and American workers, full stop. Those who suggest otherwise are being fundamentally dishonest and acting in bad faith,” he said.    

Auxin said the arguments the industry would be put in peril if tariffs were imposed on the imports in question are overstated.

“SEIA has always claimed that tariffs would undermine solar deployment. That has never come to pass,” Auxin CEO Mamun Rashid said in a statement to The Hill. “Solar deployment and domestic solar manufacturing has increased to historical highs with lawful duties in place.”

Rosen has co-sponsored a bill with Moran to repeal the Section 201 tariffs affecting solar panel component imports.

The Trump-era tariffs apply to imported solar cells and modules, and have long been vocally opposed by SEIA but backed by domestic solar panel manufacturers like Auxin. In February, President Biden extended the tariffs a further four years but eased their terms to exempt bifacial panels, a type of panel typically used by larger-scale developers. SEIA said at the time that it was “disappointed” with the extension but backed the exemption as a “balanced solution.” 

Rosen portrayed the investigation as potentially risky to a broader agenda of rapid deployment of renewable energy in the U.S.    

“We do need a green energy future. We do want a sustainable, cleaner way to produce energy. Solar is one of those ways, and we can do that every state in the country, but we have to have the right kinds of policies that allow us to continue to build what’s already on the books, and then incentivize American manufacturing to do what we need to do to continue to achieve our clean energy goals and minus and reduce energy costs,” she said.