Solar Panels at the Mesa Verde Visitor and Research Center in Montezuma County, Colorado. [Image: Dennis Schroeder - NREL Photographer / Wikimedia Commons]

Biden Provides Temporary Relief for Southeast Asia Solar Cell Imports for US Solar Industry Growth


Biden has signed a declaration of emergency and authorization for temporary extensions of time and duty free importation of solar cells and modules from Southeast Asia. This came shortly after the Department of Commerce opened up an investigation into solar cell and module imports due to claims made by California-based solar module manufacturer, Auxin Solar. According to Auxin Solar, many of these solar parts are produced by Chinese companies based in Malaysia and elsewhere in China’s effort to circumvent United States anti-dumping and countervailing duties on Chinese imports. Among these four Southeast Asian countries, Malaysia is the largest supplier of US solar cell and module imports, providing 44.8% of total US solar photovoltaic imports in 2019. However, Chinese companies provide a significant portion of these imports due to their growing presence in Malaysia. In 2021, private Chinese company, Risen Energy Co. Ltd., pledged over $10 billion towards the construction of a solar plant in Malaysia’s northern Kedah state. This is in addition to six other solar power companies already in operation in Malaysia, three of which are Chinese.

Most US solar manufacturers rely on solar cells imported from Malaysia, Vietnam, Thailand, and Cambodia, which make up 80% of total US solar imports. Currently, domestic solar manufacturers are only able to meet 20% of total US demand. A US Commerce Department decision to apply tariffs to Malaysian and other solar imports has the capacity to impact 80% of US solar firms, and delay up to half of the projects these firms have planned for 2022. One Minnesota-based solar module manufacturer, Heliene, has suspended their imports due to concerns regarding potential additional costs should the investigation lead to the imposition of import duties on Malaysian parts.

Scrutiny of solar imports and potential retroactive import tariffs for Southeast Asia comes at a time when the United States is working toward a transition to green energy to achieve President Biden's 2030 greenhouse gas pollution reduction targets and meet domestic energy demands. Given United States’ reliance on Southeast Asian solar imports, import tariffs would act as an obstacle to meet clean energy goals, and challenge domestic manufacturers and import partners. Therefore, regardless of the outcome of the US Commerce Department investigation, the Biden administration will have to continue to support a solar energy supply chain that meets energy demands and labor regulations.

Edith Conn is a research intern at the East-West Center in Washington. She is a recent graduate of the George Washington University Master of Arts in International Affairs Program.