White House Reportedly Considering Excluding Bifacial Solar Panels From Safeguard

The 15% tariff on most solar panels and the 15% tariff on imported solar cells past a 2.5 gigawatt threshold are slated to expire Feb. 6, and, according to Reuters, the White House is considering accepting some of the International Trade Commission's recommendations on extending the solar panel and cell safeguard, and rejecting others. The ITC recommended reducing the current 15% rate by just .25% in 2022, and by another quarter point each year, until early 2026, when the safeguard would expire.

The ITC said in its report that while the production of solar panels ramped up during the first three years of the safeguard, domestic industry still only has about 10% of the market, not much different from the first year of the remedy. There is no domestic solar cell production, and the ITC said that the tariff rate quota should have the same threshold as it did in the original order to make it possible for domestic cell production to return. The White House didn't immediately comment.

The White House is considering doubling the TRQ threshold, which would make it likely that no cells would face the safeguard, Reuters reported. Up to this point, the U.S. has not imported enough solar cells in any year to reach the 2.5 gigawatt threshold, but is expected to reach it in 2022. It is also considering allowing bifacial solar panels to remain outside the safeguard action.

The ITC did not take a position on whether bifacial panels should be subject to the safeguard, given that the Court of International Trade said the president exceeded his authority in belatedly adding them to the action. Currently, they do not face the 15% tariff, but CBP has suspended liquidation on all panels in case the CIT ruling is overturned on appeal (see 2112280044). That same ruling said that the safeguard tariff had to be 15% in the final year, not 18%, which had been part of the same proclamation the CIT said was invalid.

The ITC did say that excluding bifacial panels is likely to reduce demand for U.S. panels, "and that imports of bifacial modules exempt from the safeguard tariffs would 'put significant price pressure on U.S. module producers,' and would likely 'drive down U.S. market prices for modules.'" According to the ITC, even with the tariffs, foreign solar panels are cheaper than domestic ones.

Tim Brightbill, trade counsel to the American Alliance for Solar Manufacturing, was not involved with the safeguard case but has represented solar manufacturers in antidumping cases over the years. Brightbill said, "A remedy that excludes bifacial products would blow a gaping hole in the relief and would seriously undermine the Administration’s goal of strengthening the solar supply chain here in America. The Biden Administration’s handling of the bifacial exclusion will indicate how serious they are in supporting manufacturing jobs in the clean energy economy.”

He said in a phone interview that with the safeguard tariff in place, prices are comparable between U.S. producers and imports, once the logistics cost is considered. He said the domestic industry is making commercial quantities of bifacial products, and if they were subject to safeguard tariffs again "we could make even more."

He said the domestic industry has a variety of views on whether the cell TRQ level should be increased. Some say that if more cells are allowed in without tariffs, they could ramp up their module production.

The Coalition for a Prosperous America, a domestic industry group, is concerned. "The White House knows full well that excluding bifacial panels is just another huge giveaway to China," CPA Senior Vice President Nick Iacovella said. "The practical effect of this reported policy under consideration by the White House would result in a tsunami of Chinese solar imports produced from forced labor and dirty coal-fired power plants, and it would wipe out U.S. module makers and our domestic supply chain.”