The Washington PostDemocracy Dies in Darkness

Some Chinese solar-panel manufacturers have stopped shipping to the U.S. over tariff concerns, installers say

They warn the shipment freeze could derail the Biden administration’s clean-energy goals

(Bloomberg Creative Photos/Bloomberg Creative Collection)

Some Chinese solar-panel manufacturers have stopped sending panels to the United States, or are threatening to halt shipments, over regulatory concerns including a proposal for higher import tariffs, panel buyers and solar-energy developers said at an industry briefing Monday.

This freeze could derail the Biden administration’s green-energy goals and lead to large layoffs among U.S. panel installers, the solar developers said, adding that they have already delayed projects because of the lack of inventory.

Some panel manufacturers “have already stopped shipping,” said Markus Wilhelm, chief executive of Strata Clean Energy of Durham, N.C. “We are not able to get any obligations going forward for any of the projects that we have already under construction.”

The standoff is in reaction to a campaign by U.S.-based solar manufacturers that say they have been harmed by unfair Chinese competition.

The Commerce Department is expected to decide this week whether to open an investigation of a petition filed by U.S.-based manufacturers requesting higher import tariffs on panels produced in Southeast Asia by Chinese companies.

The petition claims that the Chinese companies have set up limited operations in Vietnam, Malaysia and Thailand only to circumvent anti-dumping tariffs that the United States imposed on Chinese panel producers in 2012. The petitioners argue that the companies are completing only modest final production steps in Southeast Asia while preserving most of their production in China.

Fear that the Commerce Department could agree with the petition and impose greater tariffs has prompted some of the targeted manufacturers to stop sending panels to the United States or to stop accepting orders for future deliveries, solar-energy developers and installers said at a briefing organized by the Solar Energy Industries Association.

“The biggest panel manufacturers have already stated that they will not deliver to the U.S., or to us,” said George Hershman, president of Swinerton Renewable Energy, a San Diego-based company that builds and manages solar-energy projects. “We are not able to issue purchase orders today to the largest panel manufacturers because of this issue.”

Inside the Ohio factory that could make or break Biden’s big solar energy push

He and others declined to name the panel manufacturers that have stopped shipping. The companies targeted by the petition include Longi, Trina Solar, JA Solar and JinkoSolar. The companies could not immediately be reached to comment.

The Biden administration aims to dramatically expand solar energy as part of its goal of eliminating carbon emissions from electricity production by 2035. Officials say the rate of solar-panel deployment must triple or quadruple if the nation is to hit the 2035 goal.

Companies manufacturing in Malaysia, Vietnam and Thailand supply 59 percent of the United States’ solar panels, the SEIA said. Aside from First Solar, there are few U.S.-based manufacturers of solar panels.

In another wrinkle for Chinese solar-panel manufacturers, U.S. Customs and Border Protection recently began blocking the import of some solar panels that it believes could be the product of forced labor in China. CBP is detaining the panels until importers can prove that no forced labor was used in their production.

CBP officials said an agency investigation found two indicators of forced labor at a large Chinese supplier of solar materials: intimidation and threats toward workers, and restriction of their movement. The Washington Post and human rights researchers have linked the company, Hoshine, to coercive state labor programs targeting workers from China’s Uyghur minority.

Asked whether those CBP detentions have contributed to some Chinese manufacturers’ reluctance to ship panels to the United States, Wilhelm said it “had an impact, very clearly.”

Paula Mints, a solar-industry analyst with SPV Market Research, said she had not heard of the tariff question derailing shipments, noting that a large U.S. solar developer she contacted Monday reported no problems with imports. If panels aren’t arriving, it could be due to widespread shipping delays facing many industries, she said, or to Beijing’s irritation over the CBP action.

The CBP enforcement “has had a way bigger impact than the tariffs,” Mints said.

The United States in 2012 levied import tariffs of 30 percent on solar panels produced in China, concluding that China was unfairly subsidizing its manufacturers, allowing them to dump panels into the global market at prices below the cost of production.

After those tariffs were imposed, some Chinese manufacturers shifted some of their production to Southeast Asia. The anonymous petitioners claim this was a mere attempt to circumvent the anti-dumping tariffs, which they now want the Commerce Department to levy on the producers in Southeast Asia.

The petition seeking higher import tariffs was filed by an anonymous group of companies that describe themselves as U.S.-based solar manufacturers attempting to combat unfair Chinese competition.

Timothy Brightbill, a lawyer at Wiley Rein representing the group, said they chose to remain anonymous to avoid retaliation by Chinese authorities. “Prior U.S. solar producers have been hacked by the People’s Liberation Army and subject to other types of retaliation in the marketplace,” he said.

“The Chinese companies may be assembling solar panels in another country, but all of the solar supply chain is still in China — all of the raw materials, all of the R&D and nearly all of the capital investment and equipment. So that is the definition of circumvention under the law,” Brightbill said.

He called the petition “fully consistent with this administration’s climate goals.”

“The best way to build back better in solar is to ensure that U.S. companies don’t have to compete with unfairly traded Chinese product,” Brightbill said.