The complaint against China in February by Auxin Solar, a small player in the US PV sector, continues to make waves in the US. It destabilized the entire solar energy sector in the United States and prompted President Joe Biden to invoke extraordinary powers on Monday to promote “Made in the USA” solar panels.
Joe Biden has solar panels in his eyes. A US presidential decree issued on Monday, June 6, doubles down on initiatives to increase US production and imports of solar panels.
On this occasion, the US president relied on an exceptional law dating back to the Korean War that makes it possible to force American producers to focus on certain products. In 1950, armaments, this time solar panels, were supposed to help the United States reduce its dependence on fossil and polluting energy sources.
While waiting for the US production machine to operate, this decree also provides for a two-year hike in tariffs on imports of solar panels sold by Cambodia, Thailand, Malaysia and Vietnam.
Don Quixote for solar panels?
The decree was warmly welcomed by climate activists, who in recent days have taken turns congratulating the White House tenant. “This is a huge step in the right direction on the part of the government, which is therefore aware that we are facing a climate emergency that requires a general mobilization worthy of the Second World War to ensure the transition to renewable energies as quickly as possible,” emphasized Varshini Prakash, deputy director of the Sunrise Movement, a group of youth based To the left of the Democratic Party. Jan Su, who is responsible for energy issues at the Center for Biological Diversity, a non-governmental organization working to protect endangered species, added.
Solar industry professionals have also praised the presidential initiative with both hands, as the Guardian confirms. everybody ? No, because a voice was raised to denounce the temporary rise in tariffs. Mamoon Rashid, CEO of Auxin Solar, a modest American manufacturer of solar panels, responded in an interview: “By adopting this unprecedented measure, the president has just opened the door to pro-China interests that are active in circumventing the enforcement of US trade laws” by Financial Times on Tuesday 7 June.
Until recently, the positions of this businessman were of little importance in the world of solar energy and photovoltaics (the conversion of sunlight into electricity), and even less so in the national debate. His company produces no more than 2% of the solar panels sold in the United States.
But everything changed at the end of February 2022 when Mamoun Rashid decided that a kind of American solar panel Don Quixote would be at war with Chinese PV plants. He then filed a complaint with the Trade Secretariat, accusing China of illegally circumventing tariffs on solar panel exports.
Ironically, it was the actions of this critic of the presidential decree that partly prompted Joe Biden to help the US solar panel sector, according to the Financial Times.
Because behind the headlines in the media about this presidential decree, there’s a little story about a California company of barely 50 employees that, in a few months, has become “the most hated company in the solar world,” according to the Wall Street Journal.
An investigation with dire consequences
This regression into the inferno of reputation dates back to the beginning of the year. Then a few US manufacturers of photovoltaic panels lamented the failure of tariffs on Chinese solar panels that Barack Obama, then-President of the United States, introduced to the Washington Post in 2012.
The measure was supposed to give a boost to US production, which was unable to compete with Beijing’s heavily subsidized Chinese firms and much cheaper labor.
But after China, the United States fell into Thai, Cambodian, Vietnamese and Malaysian solar panels. Unfortunate American competitors soon suspected that Beijing was using front companies from these four Asian countries to evade tariffs. Some of them decided to file a complaint – anonymously – against China at the Trade Secretariat.
The latter did not wish to conduct an investigation as long as the complainants were in hiding. At the time, Auxin Solar took up the complaint in its own name.
Then the Biden administration launched a formal investigation in March to determine the merits of this complaint. It is this measure that “brought the entire US PV sector to its knees,” says The Washington Post.
In fact, if the authorities determine that Auxin Solar is correct, all imports of solar panels or components from Asia will be subject to tariffs of up to 50% of the amount of panels sold. Including retroactively.
And that’s the problem. No one wanted to buy equipment from Asia anymore, for fear of having to pay taxes retroactively. With more than 85% of panels sold in the US being manufactured or containing materials produced in one of the four countries involved in the Auxin Solar complaint, the entire US solar market has been exposed.
Rystad Energy, a US advisory firm questioned by the Financial Times, concluded that “nearly three-quarters of all projects in the sector for the year have been halted because of this investigation”.
Auxin Solar has been targeted by angry industry professionals. “My employees are being harassed online and we receive complaints by mail,” Mamoun Rashid told the Wall Street Journal.
The contradictions of American politics
A letter was sent to Joe Biden by 22 senators on May 2, warning the president of the consequences in terms of employment if this investigation is not completed quickly.
And it will not be just an economic issue. Auxin Solar has been accused of compromising Joe Biden’s commitments to fight global warming. Nissource, an energy player, said in mid-May that it had decided to postpone the shutdown of its coal plants due to the paralysis of the solar panel sector. Even some media outlets have barely hinted that Mamoun Rashid must be funded by the fossil fuel lobby to fight his legal battle.
The latter defended himself, asserting on several occasions that he committed only his own money to the case.
The few voices who support Auxin Solar in his approach assert that this whole issue highlights above all the contradictions of US policy, the Washington Post notes. On the one hand, the United States wants to be tough with Beijing, but on the other hand, its willingness to move to a “greener” economy still depends a lot on Chinese materials. “This investigation is necessary because it shows us how independent the United States is in the field of renewable energy, otherwise we are at the mercy of a regime that violates human rights to sell its products more cheaply,” Lori Wallach, an international trade specialist with the American Economic Freedoms Project, a think tank close to the party, said. Democrat, for The Wall Street Journal.