Congress is pushing forward with new legislation that ultimately would put new tariffs on solar panels produced in China, which seemingly would be a good thing for the U.S. and the domestic manufacturing industry.
However, it’s apparent that the entire industry for green energy is ultra-reliant on China to make their businesses work. The cheap goods that are coming out of China is something that these green energy companies have come to rely on, and doing away with them – thanks to very costly tariffs – could cripple the entire industry.
Last Friday, the House passed a bill on a bipartisan basis that would restore tariffs on solar panels from China. These tariffs were already in place, but President Joe Biden suspended them in 2022 as an attempt to “satisfy the demand for reliable and clean energy.”
A year later, the bill has garnered support from both Democrats and Republicans in the House, with many Democrats in the Senate also signifying that they are in favor of the bill.
The possibility that both chambers of Congress could get behind the bill foreshadows a potential disaster for the green energy industry.
A recent report from The Washington Free Beacon showed that China has control of more than 80% of the production of all solar panels in the world. The Biden administration is certainly well aware of this figure, as they’ve instituted many different subsidies that would give the U.S. a chance to “compete with China.”
What has happened over the last few years, though, is that the demand for solar panels in the U.S. has skyrocketed. To keep up with that demand, U.S. solar panel companies have gone to China to get the parts they need so they can produce sufficient panels.
Estimates have said that if the solar tariffs were to be reimposed on Chinese solar panels, U.S. developers would lose $1 billion in fees on a retroactive basis. That has caused many trade groups and executives in the solar industry to stress the importance of maintaining the easy and cheap flow of goods from China.
On Friday, the Solar Energy Industries Association said the U.S. “cannot produce enough solar panels and cells to meet demand.”
And the American Council on Renewable Energy also said the tariffs on China “would have a devastating impact on U.S. solar deployment.”
Legislators in Washington, though, see that there’s a clear need for these tariffs to be reimposed. China has put on illegal subsidies for solar companies in their country for years now, which has allowed them to undercut their competitors in the U.S. – basically pricing them out of the market.
When tariffs were reimposed on the solar companies in China, they got around them by shipping their products through other Southeast Asian nations. This is what the new bipartisan legislation is trying to address, so that there is no way around it for the Chinese solar companies.