Colorado solar projects large and small are delayed until 2023, threatening jobs and clean energy advances, after federal officials agree to investigate a California company’s complaint that Asian companies are avoiding tariffs and dumping cheap solar panels in the United States, industry executives have said.
The supply of solar panels for home or large-scale projects has dried up, and those that remain have soared as distributors fear the US Commerce Department investigation will leave them on the hook for tariffs up to 250% of the original price. price, solar company officials said this week.
Most solar panels installed in the United States are imported, and trade disputes tend to pit a small number of remaining American manufacturers against a much larger national network of distributors, installers, utilities, and energy development companies. . Colorado solar leaders are calling on the congressional delegation to step in and stabilize the market for solar installations, needed to reduce greenhouse gas emissions from fossil fuels that cause global warming.
The probe is “in fact a market freeze, almost instantly,” said Eliot Abel, co-owner of Namaste Solar, Colorado’s largest installer of residential and commercial solar projects with 200 employees.
“There will be legitimate layoffs because people can’t build projects,” said Mike Kruger, executive director of the Colorado Solar and Storage Association trade group. “Congress could solve this problem tomorrow by saying, ‘You know what? Were done.'”
Community solar garden developer SunShare is postponing plans until next year and expects the situation to get worse as panel supplies tighten even further, CEO David Amster-Olszewski said. On one contracted project, he said, “My construction manager got a call from our panel supplier. Say they want to renegotiate prices.
“We need to put as much solar power into the ground as possible,” Amster-Olszewski said. “And these are unnatural disasters and unnecessary roadblocks. They do not help taxpayers. They don’t help jobs, because when we put off projects, we don’t hire contractors.
New disruptions in solar panel supply mean Colorado companies have to work even harder to find panels in a shrinking pipeline.
Colorado-based Atlasta Solar Center does not buy solar panels from Chinese manufacturers, but the company still faces supply chain issues. A shipment directly from Indian manufacturer Vikram Solar, which cost three to four times more than in the past, was delayed from April to June. Co-owner Lou Villaire scrambled to buy the remaining solar panels from large-scale projects, but he still had to delay installations for his clients.
“It definitely creates problems,” Villaire said. “It’s just not good in general, for customers or for businesses.”
Here’s what caused the solar market to panic
Auxin Solar, based in San Jose, Calif., sparked panic in the solar market in February when it asked the Commerce Department to investigate whether manufacturers in other Asian countries were circumventing anti-dumping tariffs imposed on the China. The accusation is that panel makers in Vietnam, Thailand and other countries simply buy the same parts at unfair prices from China, then package and ship them to circumvent duties of up to 250%.
When the Commerce Department announced March 28 that it had agreed to investigate, solar distributors had no idea how much their panels would cost, according to Colorado industry leaders, and the market froze. Large solar developers who buy panels directly from factories can’t buy panels or have no certainty about the costs they’re ordering, Kruger said.
If the cost of solar “modules” rises 150% from a tariff after winning a job offer at a lower price, Kruger said, “You’re a fool to build this project.”
“If my guys on the roof can’t install, or if NextEra Energy can’t do their big projects in Pueblo County and lay people off,” he said, “we’re not winning.”
A spokesperson for the US Department of Commerce said in a statement: “US anti-dumping and countervailing duty laws were written to be completely removed from political considerations. This process is transparent, internationally accepted and has been part of the law of the land since 1930.”
The office “will conduct an open and transparent investigation to determine if there is circumvention. Also, no decision has been made one way or the other on the merits, and no additional fees will be imposed at this time.
Industry executives not involved in manufacturing call it a decision of “career bureaucrats” insulated from the actual workings of the market. Three-quarters of solar companies surveyed by the national industry association said their orders for solar modules had already been canceled or delayed after the probe was announced. The Solar Energy Industries Association, or SEIA, said it asked for responses from 200 companies.
Pricing uncertainty and other supply chain arguments have prevented new solar systems from being built in 2021, SEIA said. About 17 gigawatts of solar capacity was added last year, but that was 3 GW less than expected, and construction slowed noticeably in the fourth quarter after another round of pricing arguments.
Part of the Colorado delegation to the US Senate and House weighed in on behalf of distributors and developers. “Expanded tariffs on products from these countries would threaten thousands of U.S. solar jobs,” according to a March letter to the Commerce Department from Democratic sensators Michael Bennet and John Hickenlooper and other senators.
The letter asked the department to “carefully consider” the manufacturer’s request for an investigation, especially since the Commerce Department denied three similar anonymous requests in November.
Gov. Jared Polis’ office shared a letter it sent in September, ahead of the imposition of a new round of tariffs, warning that new trade restrictions “could have devastating effects on solar power growth. in Colorado” and across the country.
“Rapid scaling of solar power in the United States is central to our country’s future,” Polis wrote, and “everything done in the immediate term to undermine solar deployment on a large scale poses a potential threat to the entire system and industry.”
Tariffs and tariff surveys now cover 80% of the panels used in the United States, said Abel of Namaste. No business can operate when its raw materials cannot be priced, and that pain comes after devastating work stoppages during the pandemic, he said.
“What’s going to happen is you’re just going to cause pain to existing businesses, independent businesses like ours across the country who are trying to install solar power for their customers who are trying to help achieve our climate goals,” said Abel. “So for a goal that’s probably ‘How can we create more manufacturing jobs in the United States,’ ironically, the effect will be the exact opposite of that. It’s going to lead to job losses.”
When asked if Namaste was going to lose jobs, Abel replied: “We are already risking that, just at the start of the investigation. And if it continues, we will be in the same boat as everyone else. When you have no plans and no income in the business, what choice do you have? »