Commerce Department issues preliminary determination in solar circumvention case

This week, the U.S. Department of Commerce issued a preliminary determination that certain companies in Southeast Asia are circumventing Anti-Dumping/Countervailing Duties (ADCVD) imposed on Chinese solar products.

Specifically, the Commerce Department determined that imports of certain crystalline silicon photovoltaic cells that were exported from Cambodia, Malaysia, Thailand, or Vietnam using parts and components produced in China are circumventing the antidumping duty (AD) and countervailing duty (CVD) orders on solar cells and modules from China.

Groups representing the U.S. solar industry said the decision could lead to new duties and a lack of certainty for the U.S. solar industry.

“Today’s announcement from the Department of Commerce is a step backward for the United States. This decision upends a decade of precedent that Commerce itself established, undercutting any sense of business certainty that American companies rely on to continue investing in America’s clean energy future and impacting our ability to reduce our dependence on foreign energy sources,” JC Sandberg, Interim CEO and chief advocacy officer at American Clean Power, said.

Sandberg said that solar companies are making critical 2024 procurement decisions now, and this decision casts greater uncertainty about the future of the solar industry in the United States. Sandberg added that it could also undermine the impact of the Inflation Reduction Act, harming domestic manufacturing and endangering industry jobs.

“We’re obviously disappointed that Commerce elected to exceed its legal authority. As a basic fact, solar cell and module manufacturing greatly exceed the anticircumvention statute’s ‘minor or insignificant processing’ limitation,” Abigail Ross Hopper, president and CEO of the Solar Energy Industries Association (SEIA), said. “The only good news here is that Commerce didn’t target all imports from the subject countries. Nonetheless, this decision will strand billions of dollars’ worth of American clean energy investments and result in the significant loss of good-paying, American, clean energy jobs.”

She added that while President Joe Biden previously provided a two-year window before the tariff implementation, that window is quickly closing. Two years is not enough time to establish manufacturing supply chains that will meet U.S. solar demand.

“This is a mistake we will have to deal with for the next several years,” Hopper said.

The final determination on this case, called the Auxin Circumvention Case, is expected in May 2023.