Thomas Hand, co-founder of Manchester-based MHG Solar, is having trouble finding panels to complete a solar project that would power most of the municipal buildings in Fair Haven.
Disruptions in the solar supply chain have created massive challenges that now stand in the way of the 500-kilowatt project’s completion, which is more than two-and-a-half years in the works.
Hand isn’t alone: Due to a new U.S. Department of Commerce investigation, many solar panels have evaporated from the market. As a result, representatives from solar companies around the state have said their projects have come to a standstill.
Industry leaders say the impact from the potential new tariff could affect jobs connected to Vermont’s solar industry and, across the country, stymie progress toward meeting climate and renewable energy goals.
The investigation “is probably having an impact on everyone” in Vermont’s solar industry, said Jim Merriam, CEO of Norwich Solar, based in White River Junction.
At the end of March, the Biden administration announced a new probe into whether China is avoiding tariffs that apply to solar panels by routing some of its business through manufacturers in southeast Asia, which then sell to the U.S.
Merriam has worked with companies from southeast Asia that are now being investigated, and one company threatened to cancel an order, he said.
Norwich Solar builds projects in Vermont, New Hampshire and Maine and employs around 35 people and “dozens and dozens of subcontractors and their employees,” he said.
“When you have an injection of variability on what panel is going to be used, it ripples through the whole design, and just adds risk everywhere, because the project is so centered around what manufacturer and model or panel you’re using,” Merriam said.
Prices for available panels are going up, Hand said. As of early April, he said the price of one 445-watt panel increased from around $175 to $225.
Hand, reading an email he received from Trina, a solar company headquartered in China, said the company is in a “holding pattern” until the investigation is resolved.
China dominates the world’s solar market. In an effort to address trade practices that place United States manufacturers at a disadvantage, the Trump administration first levied tariffs against solar products coming from China. Biden extended the policy earlier this year, with some changes.
In February, Auxin Solar Inc., a California-based solar company, filed a petition asking the U.S. Department of Commerce to investigate certain imports of solar cells and panels from southeast Asia. The inquiry applies to Cambodia, Malaysia, Thailand and Vietnam, according to a notice from the International Trade Administration, which is part of the Department of Commerce.
Heather Zichal, CEO of American Clean Power Association, and a former energy and climate change adviser to former President Barack Obama, told The Associated Press that the investigation could affect as much as 80% of the solar panel supply to the United States.
During the review period of the investigation, which she called “egregious” in an op-ed on the organization’s website, tariffs of “up to 250% are effectively applied to the majority of America’s solar module supply — artificially raising the total cost of domestic solar projects to a level that essentially freezes project construction,” she wrote.
Fear of the expanded tariffs, which could be retroactive, has prompted many companies to stop delivering to the United States, industry leaders say.
In response to claims from solar companies about the handling of the investigation, Kevin Jones, director of the Institute for Energy and the Environment at Vermont Law School, objected to the idea that the administration shouldn’t “follow the law and honestly investigate claims that are brought to them legally.”
“To me, there is nothing but trust we should have in the Biden administration and the Commerce Department to look at this in terms of following the law and the best interests of the U.S. in the clean energy industry,” he said.
Peter Sterling, executive director of Renewable Energy Vermont, an industry group that represents solar and other renewable companies, said many in the industry are looking for more certainty about the investigation and when a decision might come.
“If there’s an idea of what the scope of that ruling would be, that helps everyone plan,” he said.
Paul Lesure, co-founder and president of Green Mountain Solar, based in South Burlington, said the investigation affects the company indirectly. Green Mountain Solar works mostly on residential projects, he said, and typically buys panels from companies in South Korea, or from U.S. companies that have manufacturing facilities in Vietnam and Singapore — not those being investigated.
The investigation is squeezing the market, he said. Those who can’t buy panels from the companies being investigated are turning to the remaining manufacturers.
“So these other people are shifting to the panels we would actually be using,” Lesure said, “causing supply chain issues and price hikes for us as well.”
Rather than relying on a steady stream of panels, the company may need to take out a loan, for example, to “try to buy panels up when we can get them so that we can continue to deliver for customers,” he said.
Sterling is frustrated by the impacts of the investigation. Still, he said he understands that the Biden administration was obligated to investigate Auxin Solar’s claims.
Long-term policies and “massive public investment” are needed to support a domestic manufacturing industry in the United States, he said, and until those policies are established, it will be difficult for solar companies to continue building out projects without a steady flow of panels.
“We are, minimum, three — probably five years away from having a truly viable domestic solar economy that can meet our needs,” Sterling said.
“You can’t just kneecap an entire industry that’s trying to stop climate change,” he added.
