Biden moves to ease trade turmoil threatening his solar energy ambitions

President Joe Biden won't impose new tariffs on imports of solar power equipment for two years to help ease the fears that have slowed the growth in the renewable energy sector, and will invoke the Defense Production Act to spur domestic manufacturing of critical clean energy technologies, including solar panel parts.

The moves come as the solar energy industry has been roiled by a Commerce Department probe into whether companies in four Southeast Asian countries have circumvented the tariffs on Chinese shipments of solar equipment to the U.S. Those fears have slowed the development of large projects that are crucial to meeting the Biden administration's goal of eliminating carbon emissions from the power sector by 2035.

Instead, the president will facilitate a 24-month "bridge" for certain solar imports, allowing developers to source solar modules and cells from the four countries — Cambodia, Malaysia, Thailand and Vietnam. Biden will also authorize the Energy Department to use the DPA to rapidly expand American manufacturing of solar panel parts like photovoltaic modules and module components, as well as building insulation, heat pumps, equipment for making and using clean electricity-generated fuels, and power grid infrastructure like transformers.

Just the initiation of the probe in March and the threat of potential retroactive tariffs has caused widespread project cancellations and delays. The White House has faced pressure from both parties to take action to stem fallout from the probe, which Commerce officials have described as a “quasi-judicial” process that leaves little room for the secretary or president to directly weigh in.

Faced with an onslaught of public pressure on the issue, the White House held a meeting last month with several Democratic senators who oppose the inquiry, and officials promised action soon to ease the uncertainty for the solar industry.

Biden’s announcements Monday are a “much-needed reprieve from this industry-crushing probe,” said Abigail Ross Hopper, president and chief executive officer of the Solar Energy Industries Association, which has opposed the Commerce inquiry.

“The president is providing improved business certainty today while harnessing the power of the Defense Production Act for tomorrow,” she said in a statement. “Today’s actions protect existing solar jobs, will lead to increased employment in the solar industry and foster a robust solar manufacturing base here at home.”

In addition, the White House announced the development of master supply agreements for domestically manufactured solar systems to increase the speed and efficiency with which domestic clean electricity providers can sell their products to the U.S. government and so-called super preferences to apply domestic content standards for federal procurement of solar systems.