With new solar tariffs on hold, 6 solar developers lay out how the sector can seize the moment

June 9th, 2022

Nobel Chang, co-founder and managing partner, joins other solar developers in sharing ways the industry can help bolster domestic manufacturing.

Palladium Energy applauds the Biden Administration for its swift action in declaring a two-year tariff exemption on solar panels from Southeast Asia and for invoking the Defense Production Act to embolden domestic manufacturing of solar panels and components. The tariff suspension will help alleviate certain pressures within the currently challenging solar supply chain and its impacts on project development and construction schedules. Enacting the Defense Production Act creates a bridge to more American clean energy jobs across the board—from manufacturing to development to construction.

Today, solar developers and investors stand battered from the price hikes due to the supply and demand shift of the module market while domestic manufacturing is not properly incentivized to build competitively priced capacity. Two years passes by very quickly and the U.S. government, state governments, and the solar industry can certainly do more to bolster domestic manufacturing that will have a net positive impact on the clean energy transition as a whole.

Congress already has an arrow in its quiver with the Solar Energy Manufacturing for America (SEMA) Act. The bill creates a new tax credit for the production and sale of solar equipment in the United States. SEMA will boost manufacturing by incentivizing manufacturers in America across the supply chain. The U.S. House of Representatives already passed SEMA and the bill sits on the desk of the Senate. Together with the Defense Production Act, SEMA would create a carrot for domestic manufacturing and eliminates the need for a stick (i.e., tariffs).
The solution does not reside only at the federal level.

States and local governments can help encourage domestic manufacturing by providing incentives for clean energy developers and investors to utilize domestic content. May it be more favorable terms on offtake contracts or the ability to obtain permits for projects, the possibilities are endless. For example, a North Carolina solar tax credit helped the Tar Heel state rank second in the U.S. in installed solar capacity in 2019 while attracting (and training) top-tier clean energy talent to the state. In this way both Federal and State policies are bolstering domestic manufacturing.

Finally, developers, financiers, and owner/operators of solar projects should foster strong relationships with U.S.-based manufacturers to encourage the long-term viability of made-in-America solar modules and components. The solar industry can collaborate closely with domestic manufacturers by giving a forward look at development pipelines and forming partnerships to facilitate long-term capacity. We need to see a dramatic decrease in the cost curve to continue to deploy solar with U.S.-made modules for domestic manufacturing to be sustainable.

We are on the precipice of the renewable energy transition and the first half of 2022 looked bleak. The 24-month shot clock has started and Palladium Energy is proud to be part of the renewable energy transition alongside domestic manufacturers

Read the full article with the link from Renewable Energy World below.