(Bloomberg)—President Joe Biden is set to extend tariffs on imported solar equipment but leave in place a critical exemption, a senior administration official said, attempting a middle-ground approach intended to boost domestic manufacturing as well as U.S. renewable-energy deployment.
The tariffs had been scheduled to expire in early February and will now run for another four years, in keeping with an earlier recommendation from the U.S. International Trade Commission. Former President Donald Trump introduced the tariffs in 2018.
Biden’s move includes an exemption for imported two-sided, or bifacial, panels, according to the official, who declined to be identified because the details aren’t yet public.
The exclusion, which covers a big part of the U.S. solar market, had been granted by Trump, who later tried to eliminate it, though the exemption remains in place.
The president is also doubling the allowable import quota for duty-free solar cells to 5 gigawatts, enabling companies to import their proprietary cells. The decision was rooted in the recognition that the U.S. does not currently produce solar cells and module manufacturers shouldn’t have to pay a tariff on a key input, the administration official said.
Tariffs make the imports more expensive and could slow Biden’s efforts to eliminate carbon-dioxide emissions from U.S. power grids by 2035. The target was a key component of his presidential campaign and won over progressives who have called for bold action to battle the worsening climate crisis.
The exemption for two-sided panels—previously decried by some domestic manufacturing advocates as a loophole—could ensure steady low-cost imports of those devices, which are now widely used in large U.S. solar projects.
Biden’s approach was described as a “balanced solution,” by the Solar Energy Industries Association. The group’s chief executive, Abigail Ross Hopper, praised the exemption for bifacial panels.
“Today’s decision recognizes the importance of this innovative technology in helping to improve power output and lower costs in the utility segment,” she said in an emailed statement.
The development nonetheless will probably frustrate some domestic solar manufacturers that had opposed the exemption.
Biden faces dueling priorities when it comes to solar. On one hand, he wants the U.S. to use more of it to reduce carbon emissions. On the other, tariffs help U.S. panel makers compete with Chinese rivals.
China dominates the world’s solar manufacturing, though the U.S. imports most of its panels from Thailand, Malaysia and Vietnam, including from factories owned by Chinese companies. The tariffs Biden is extending are layered on top of existing antidumping and countervailing duties on solar cells and panels from China.
Administration officials and solar supporters have separately urged congressional passage of legislation with expanded tax credits for solar energy and advanced energy manufacturing.
The senior administration official stressed that tariffs alone are not going to bring back solar cell production or grow module production in the U.S. sufficiently to meet the country’s needs.
Biden also has directed the U.S. trade representative to conclude agreements with Canada and Mexico with the aim of excluding them from the tariffs.
The U.S. International Trade Commission recommended in December extending the tariffs after determining that solar imports remain a threat to U.S. manufacturers. Still, the move is likely to frustrate climate proponents who had called for Biden to eliminate them a year ago after his inauguration.
—With assistance from Ari Natter and Jenny Leonard.
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