The US House and Senate voted to restore solar tariffs – and Biden just vetoed that [update]

The US House of Representatives and Senate voted to restore tariffs on solar panels made in four Southeast Asian countries. President Joe Biden just vetoed that legislation. And good thing, because that legislation would have seriously injured the young US solar industry.

May 16: President Joe Biden has vetoed legislation passed by the US Senate and House to restore tariffs on solar panels. It was only Biden’s third veto in his presidency. He stated today on the White House’s briefing room page:

The [solar tariff waiver] rule implements a temporary, 24-month bridge to make sure that when these new [US] factories are operational, we have a thriving solar installation industry ready to deploy American-made solar products to homes, businesses, and communities across the Nation. Given the progress we are making on American solar, I do not intend to extend the tariff suspension at the conclusion of the 2-year period in June 2024.

Passage of this resolution bets against American innovation.  It would undermine these efforts and create deep uncertainty for American businesses and workers in the solar industry.

Therefore, I am vetoing this resolution.

Congress overriding Biden’s veto appears unlikely, as it would need two-thirds majorities in the House and Senate.

George Hershman, CEO of SOLV Energy, the US’s largest utility-scale solar contractor, said in response to the veto:

President Biden’s veto of this harmful resolution is a victory for U.S. solar companies and the growing solar workforce. Repealing the two-year moratorium of new solar tariffs would have created business uncertainty, placed tens of thousands of clean energy jobs at risk, and stalled solar projects across the country.

And Abigail Ross Hopper, president and CEO of the Solar Energy Industries Association (SEIA), said:

President Biden’s veto has helped preserve our nation’s clean energy progress and prevented a bill from becoming law that would have eliminated 30,000 American jobs, including 4,000 solar manufacturing jobs. 

All sides of this debate can agree that we need to deploy American energy and manufacture those components and technologies in America. Every metric shows that the Biden administration’s policies are working to achieve both goals, and we thank the President for taking this action and protecting the livelihoods of 255,000 solar and storage workers nationwide.

May 3: The US Senate today voted to restore tariffs on solar panels. The vote was 56-41, with nine Democrats voting in favor. President Joe Biden has vowed to veto the legislation.

Abigail Ross Hopper, president and CEO of the Solar Energy Industries Association (SEIA), said:

Any legislation that threatens 30,000 American jobs and weakens our nation’s energy security to this degree should be dead on arrival.

Energy workers across the country are looking to President Biden to protect their livelihoods. We urge the President to quickly and decisively veto this damaging resolution.

April 28: The 221-202 bipartisan vote sends the measure to the Democratic-controlled Senate – 12 Democrats voted for it, and 8 Republicans voted against it. President Joe Biden has said he will veto the legislation.

In 2022, President Joe Biden waived tariffs on solar products made in Cambodia, Malaysia, Thailand, and Vietnam while the US Department of Commerce (DOC) conducted an investigation into whether those imports were circumventing duties on goods made in China, thus violating US law. The DOC is expected to issue its decision next week.

The majority of legislators voted for this measure to boost US solar manufacturers who say they can’t compete with cheaper solar products made in Asia. But while that’s well intended, it’s very poorly executed, due to timing.

The bottom line is, US solar manufacturing is growing, and it does need legislative support – the Inflation Reduction Act does that. But US solar manufacturing is nowhere near robust enough to supply the huge and growing domestic demand for solar products. That’s why Biden waived the tariff – to keep the supply chain going while US domestic manufacturing ramps up.

The reinstated tariffs are going to boost costs for US solar developers and slow down the supply chain, and thus solar developments needed to fight climate change. We don’t have time to delay the fight against climate change.

While this might seem protective to US solar manufacturing, it’s harmful to US solar installation, which currently employs many more Americans than manufacturing does.

In short, the House made a bad decision that could seriously harm the US solar industry.

George Hershman, CEO of SOLV Energy, the US’s largest utility-scale solar provider, said in an email statement today:

This resolution could put companies on the hook to pay more than a billion dollars in retroactive tariffs and jeopardize tens of thousands of jobs across the country. President Biden’s pause on new solar tariffs provided a much-needed bridge for companies to deploy clean energy and keep American workers on the payroll as the US builds out a dramatic ramp-up in our domestic solar manufacturing sector.

And Abigail Ross Hopper, president and CEO of the Solar Energy Industries Association (SEIA), also issued a statement:

Today the House of Representatives failed America’s 255,000 solar workers and put the near-term impact of the IRA at risk. The legislation will impose $1 billion in retroactive tariffs and cause 30,000 Americans to lose their jobs this year.

The two-year solar tariff moratorium was imposed as a strategic bridge to stand up U.S.-based manufacturing capacity while allowing developers to keep building projects and move us toward our clean energy goals. Companies are making massive investments in manufacturing facilities across the country thanks to the IRA, and all this legislation serves to do is undercut American businesses as they invest billions in capital and seek to employ thousands of workers.

We are urging senators to see through this political charade and examine the facts at hand.

The US cannot produce enough solar panels and cells to meet demand, and the remaining 14 months of this moratorium gives us time to close the gap. The United States can get there and become a global leader in clean energy manufacturing and development. Overturning the moratorium at this stage puts that future at risk.

Read more: Here’s how a new US protectionist move is backfiring badly on the US solar industry

Photo: iStock

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