Corporate buyers of renewable energy welcomed the news that President Joe Biden paused new tariffs on solar module imports, but offered caution about the path forward for investors over the next two years.
ACORE CEO Greg Wetstone (left) is joined by Pat Reiten of Berkshire Hathaway Energy (center) and Google’s Caroline Golin (right) for a fireside chat on federal policy for clean energy at the ACORE Finance Forum on June 7, 2022.
"We were all holding our breath and really applaud the administration," Caroline Golin, Google's global head of energy market development and policy, said during a panel at the ACORE Finance Forum on June 7. "I think where we're at is we're scrambling to figure out what this actually means; what this means for our projects that were stalled; what this means for existing PPAs and projects that we were trying to execute on.
"What does this actually mean?"
Golin said Biden's two-year pause on new tariffs on solar modules imported from four Southeast Asian countries gives investors, like Google, some relief, but does little to secure long-term stability.
Details of the role of the Defense Production Act to boost domestic manufacturing of solar modules were also limited in the days after the announcement.
The White House said a federal directive for agencies to procure solar modules from domestic manufacturers could stimulate demand by 1 GW in the near term and 10 GW over the next decade.
It's true— the Commerce investigation of the Auxin Solar tariff petition will continue. If the agency finds that companies in Thailand, Vietnam, Malaysia, and Cambodia are skirting U.S. trade duties against China, tariffs of 50-200% could be levied at the expiration of Biden's 24-month pause.
Congress, meanwhile, seems no closer to passing a comprehensive incentive package for clean energy. Incentives for domestic solar manufacturing were included in the Build Back Better Act, but were stalled when the reconciliation package failed.
"When you're investing over 10, 20, 30 years, having a two-year window where you don't know what's going to happen going forward isn't a good investment," Golin said. "We're heading into a midterm season and I think that if we don't see any movement in the next month, it's going to be hard to see the light at the end of the tunnel."
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Pat Reiten, senior vice president of public policy at Berkshire Hathaway Energy, echoed Golin's support for building out a domestic supply chain for clean energy.
Experts estimate that ramping up domestic manufacturing capacity to meet U.S. solar demand could take two years or more.
"For the short term, one would hope that this clears the price risk for developers who still yet have to procure equipment for inflight projects," Reiten said. "The hope is that the 24-month safe harbor period will provide the opportunity to work on these other tools to bolster domestic manufacturing."
Solar developers share those concerns.
Scott Wiater, CEO of the community solar developer Standard Solar, said the administration's two-year reprieve is "vital" to free up the supply chain for projects in the pipeline.
But he added that there is "work still ahead of us" to ensure long-term stability.
“The long-term growth of domestic manufacturing through incentives and otherwise remains a critical need if our industry is going to proceed unimpeded by future tariffs and other obstructionist policies," Wiater told Renewable Energy World.
