Democrat: Biden’s solar plan ‘builds a bridge’ for U.S. manufacturing — but there's more work to be done

Akiko Fujita

·Anchor/Reporter

Sun, June 12, 2022, 

President Biden signed an executive order on June 6 that invoked the Defense Production Act to accelerate domestic production of solar parts.

The action, taken in conjunction with a two-year pause on additional solar tariffs from 4 southeast Asian countries, signaled the administration’s public commitment to reduce U.S. reliance on foreign imports in a market dominated by the Chinese.

"What the president's plan does is it keeps the jobs that we already have in the U.S., in U.S. manufacturing of things like racking and tracking, inverters, all of those trade jobs installing existing panels, and the installers who do rooftop solar," Senator Martin Heinrich (D, NM), a member of the Senate Committee on Energy and Natural Resources, told Yahoo Finance Live (video above). "And then it builds a bridge to more U.S. manufacturing of actual panels."

At the same time, Heinrich added, it is unrealistic to build out the U.S. clean energy infrastructure without a reliance on Chinese imports given America’s current footprint in the space.

"A huge amount of the existing jobs in creating utility scale projects, as well as creating distributed rooftop projects, couldn't exist over the course of the next couple of years [without imported parts],” he said. “We need to about triple our domestic capacity to really have the kind of impact that we want. And the president's plan does that."

U.S. Senator Martin Heinrich (D-NM) speaks during a Senate Energy and Natural Resources Committee hearing on Capitol Hill in Washington, U.S., January 11, 2022. REUTERS/Sarah Silbiger

The president’s plan specifically puts the U.S. on track to triple domestic solar manufacturing capacity by 2024, according to the White House. That would bring the total capacity for clean solar energy to 22.5 gigawatts — enough to power more than 3.3 million homes.

Working against the plan are the inherent challenges that come with an ambitious clean energy buildout, given the limited existing capacity to manufacture in the U.S.

'You can't ask people who are working in those fields to just wait two years'

In March, the Commerce Department launched an investigation into Chinese solar companies accused of circumventing U.S. tariffs by routing parts intended for America to four Southeast Asian Countries.

And while officials have yet to find evidence of violations, the potential for additional tariffs on parts from countries that control roughly 80% of solar modules used in the U.S. brought many existing projects to a standstill.

Within weeks, the Solar Energy Industries Association (SEIA) said more than 300 domestic solar projects had been canceled or delayed, with some companies considering layoffs. The trade group also slashed its annual installation forecast by nearly 50 percent.

“You can't ask people who are working in those fields to just wait two years to start working in their jobs again," Heinrich said, referring to the two year pause. "They need to be continually building capacity for the next two years, which is why the two-year waiver is so important."

A new floating solar panel system is deployed on Big Muddy Lake at Camp Mackall as the U.S. Army hosts a ribbon-cutting event to unveil the solar energy system on June 10, 2022 at Camp Mackall in Aberdeen, North Carolina. (Photo by Melissa Sue Gerrits/Getty Images)

The U.S. has collected anti-dumping and countervailing duties on solar imports from China since 2012 — when the Obama administration first imposed tariffs — after concluding that Chinese firms benefited from generous government subsidies and were selling at prices well below the cost of production. China currently controls more than half of the world’s polycrystalline silicon, which is a critical supply used in solar panels.

China’s stronghold on the industry has gotten renewed scrutiny because of where its solar components are manufactured: Roughly 80% of China’s polycrystalline silicon supply is produced in the northwest region of Xinjiang, the industrial hub where the U.S. has accused Beijing of committing “genocide and crimes against humanity” in its treatment of Uyghurs and other Muslim minority groups.

Heinrich suggested that the best solution lies in following through with the Biden administration's plan.

“Rather than pitting one set of jobs against another domestically in the U.S., what the president really said is: We're going to come up with a plan to make sure we have both.” Heinrich said. “So much of our inflation has been tied to fossil fuel commodity prices. And so the faster we can make this transition to clean energy, the more we ease inflationary pressures there as well.”

Akiko Fujita is an anchor and reporter for Yahoo Finance. Follow her on Twitter @AkikoFujita