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‘Misinterpreted’ data: It’s time to end Commerce solar tariff inquiry

AP Photo/Charles Krupa, File
FILE – U.S. Secretary of Commerce Gina Raimondo speaks during an address at Brown University, March 15, 2022, in Providence, R.I. Raimondo pushed back forcefully Wednesday, May 11, against critics — including some within the Biden administration — who say a government investigation of solar imports from Southeast Asia is hindering President Joe Biden’s ambitious climate goals.

Launched in late March, the Commerce Department’s solar tariff inquiry has been controversial from the beginning. Commerce initiated the process in response to a petition from a California solar company that had little to offer in the way of substantiation for its claim. Since then, the inquiry — which threatens the imposition of retroactive tariffs of up to 250 percent on imports of key solar panel components — has created immense cost uncertainty and brought the booming growth in U.S. solar deployment to a screeching halt. 

The petition conceded there was no direct data to buttress its assertions because the petitioner, unknown to many in the renewable sector, lacked access to third-party data. The best it could do was provide research on solar manufacturing by BloombergNEF, which is cited dozens of times both in the petition and the Commerce Department memo that launched the tariff process. But now, in a devastating twist, the authors of this same Bloomberg research reveal this usage of their data does not “accurately reflect our research.”

Given this new information, we call on Commerce Secretary Gina Raimondo to bring the inquiry to a rapid end.

In response to questioning from Sens. Brian Schatz (D-Hawaii), Jerry Moran (R-Kan.), Jacky Rosen (D-Nev.) and others, Raimondo has claimed that she did “not have discretion or ability to weigh in,” reflecting earlier statements that her “hands are tied.” There is good reason to question such an assertion in any circumstance, but surely all can agree that Commerce is not obliged to pursue an inquiry based on mischaracterized data. Commerce Department regulations specifically provide that the secretary can rescind a circumvention inquiry “if the secretary determines it is appropriate to do so.”

We urge Commerce to act quickly. After all, the booming growth in American solar power has been one of the few bright spots that give hope to scientists working to combat climate change. Prior to the Commerce inquiry, the U.S. solar sector demonstrated impressive resilience and routinely outperformed expectations, becoming an important driver for national economic growth.

But companies that invest in, develop, or buy solar power cannot be expected to do business in an environment where the costs of solar equipment have become essentially unknowable. A related problem is that solar cells and modules have become scarce in the U.S. since Commerce put its process in motion, as global suppliers choose to ship their solar products to other nations where they do not risk punitive tariffs. 

The Solar Energy Industries Association (SEIA) documented the scope of the impacts in a recent survey of more than 700 companies. SEIA found 83 percent of companies that purchase or use photovoltaic modules have been told expected shipments were canceled or delayed. The majority of respondents report that at least half of their workforce is now at risk. And 80 percent of domestic manufacturers, the group this Commerce action was supposedly intended to benefit, describe the inquiry as “severely negative” or “devastating.” 

More than 300 new solar projects have been canceled or delayed in the wake of this inquiry. Meanwhile, electric utilities now deprived of anticipated new solar energy installations are concerned about increased power prices and reduced grid reliability as we head into the warmest months of the year. Among several examples, the Northern Indiana Public Service Company recently announced the Commerce inquiry has forced it to delay the planned shutdown of two coal-fired power plants by two years, a tragic setback to climate goals that could be only a harbinger of what is to come.

Absent quick action by Secretary Raimondo, the paralysis of the solar sector resulting from Commerce’s action will result in higher electricity bills, a less reliable grid, and a debilitating blow to the Biden administration’s ambitious clean energy and climate goals. Energy Secretary Jennifer Granholm expressed grave concerns about these impacts in recent testimony, warning that the Commerce inquiry is “smothering” solar investment and jobs.

It’s time to end this destructive process and allow the renewable sector to recover and resume its role in driving economic growth, reducing electricity costs, and lowering greenhouse gas emissions. Surely the revelation that the investigation was premised on mischaracterized research is sufficient reason for an abrupt course change, and more than meets the standard for when it is “appropriate” to bring a tariff investigation to a prompt end.

Gregory Wetstone is President and CEO of the American Council on Renewable Energy, a national nonprofit that unites finance, policy and technology to accelerate the transition to a renewable energy economy.

Tags Biden climate policy Brian Schatz Climate change Gina Raimondo Jacky Rosen Jennifer Granholm Jerry Moran Solar Industry Solar power solar tariffs U.S. Commerce Department

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