An alarmed solar industry says a US trade probe into China will totally fry it. So why is the company sunny? | Real clear wire

Publicly, major solar developers and many climate change activists are sounding the alarm over an ongoing investigation into trade abuses by Chinese manufacturers.

Abigail Ross Hopper, CEO of the Solar Energy Industries Association, last month described the U.S. Commerce Department investigation as “the most serious crisis we have faced in our collective history.”

Heather Zichal, a former White House energy adviser under President Barack Obama, said the review of China’s business practices “drives a stake to the heart of planned solar projects.”

the The New York Times reported last month that “the solar industry is ‘frozen’ as the Biden administration investigates China” on claims by solar producers, there is offshoring work to avoid tariffs.

But the CEOs of some of the biggest solar players in the United States are telling a different story to investors and subscribers, according to a review by RealClearInvestigations of earnings call transcripts and solar project plans.

Kirk Crews, CFO of NextEra Energywhich presents itself as the world’s largest producer of wind and solar energy, told Bloomberg that if the investigation found that China had circumvented tariffs by offshoring, “it would be the end of a decade of trade practices”.

But the crews told analysts in an April investor call that, despite the federal investigation, “we remain comfortable with our current development expectations for wind, solar and storage.”

Several other major solar producers have also announced that they are moving forward with projects this year, including duke energy and SOLV Energy.

“Even with the commercial cases, solar demand has continued to grow — solar jobs continue to grow,” said Tim Brightbill, a Washington, D.C.-based attorney for the National Solar Producers, whose complaint last year brought also alleged that China was avoiding tariffs.

The disconnect between public and private words and deeds illustrates a solar industry that presents itself as a progressive mission to save the planet and actually behaves more like a traditional big business. It manages expectations in political and business arenas through tailored messaging to these distinct audiences. Behind the words is a highly competitive company focused on keeping costs low – even if that means sourcing cheaper materials from Chinese companies, some of which are accused of relying on highly polluting coal-fired power, d using slave labor or violating trade agreements.

The Commerce Department launched its investigation in response to a petition filed in February by a US competitor to Chinese producers, Auxin Solar, a small California-based solar parts maker, which alleged that China was avoiding tariffs by routing its production through four Southeast Asian countries.

Auxin alleges that the manufacturers in those four countries – Thailand, Vietnam, Malaysia and Cambodia – are Chinese companies that use the factories for panel assembly, the last step before shipping and installation. Factories in these countries “use affiliated Chinese input suppliers and a fully integrated Chinese supply chain to circumvent [tariffs]“, according to the complaint of Auxin.

The complaint maps the alleged movement of solar parts to the four countries from China, as direct imports of Chinese solar parts to the United States have fallen over the past three years while increasing from the four South Asian countries. -East.

She cites a Vietnamese company, Boviet Solar, a subsidiary of the Chinese company Bowaywho listed on their site in 2017 that its appeal to solar producers is that “Vietnam is not a listed anti-dumping and countervailing region in the United States. There are no tariffs influencing Boviet’s operations in the United States, and these cost savings trickle down ultimately on the buyer.”

“The cheap talk now dominates everything in solar energy,” said Dustin Mulvaney, a professor in San Jose State University’s Department of Environmental Studies, who studies solar energy supply chains. . Mulvaney said there is no way to control the supply chain because the components needed to build panels are built into the system. The origin of the components, he said, is difficult to trace.

The main area of ​​concern is the Chinese region of Xinjiang, one of the world’s main poles of production and exploitation of solar energy, where the gross domestic product has doubled since 2012, despite being accused by several countries of using forced labour. The Chinese government has denied the charge.

A 2021 report by Horizon Advisory, a geopolitical consultancy, cites Chinese solar companies Daqo New Energy, East Hope Group, GCL-Poly and Jinko Solar among companies in the Xinjiang region using forced labor, which the companies deny. An estimated 45% of polysilicon, a key component of solar panels, is produced in Xinjiang.

Products made with forced labor are banned in the United States, and some American solar companies have additionally signed a non-binding pledge to avoid factories known to use forced labor.

But circumventing human rights concerns, the Solar Energy Industries Association, the national nonprofit trade association of the solar energy industry in the United States, in April asked its members to sign a petition against Auxin’s complaint, warning “there is not enough capacity to meet U.S. demand anywhere else in the world except China.” The association says investigating the complaint “will also make it impossible to meet President Biden’s climate goals,” which include making 40% of the electricity supply in the United States will be powered by solar energy by 2035.

The Biden administration is caught between the Commerce Department’s legal obligation to investigate possible tariff evasion and its stated imperative to grow the solar industry, an urgency reinforced by renewable energy mandates in 38 statesincluding 12 that require 100% clean energy by 2050.

If the industry gets its way, China will play an important role in achieving those goals – however un-environmentally friendly the process may be. Last year, China announced its intention to build 43 new coal-fired power plantsin part to meet the demand for more panels.

“The amount of fossil energy needed to get materials from China is already high,” said Tom Beline, an attorney who represents Auxin in his lawsuit. “These parts are produced from coal-fired power plants, using international freight which also uses fossil fuels. By the time the parts arrive here in the United States, the carbon footprint is huge. »

The solar tariffs on China were first imposed in 2012 after the Commerce Department determined the country was “dumping” government-subsidized parts into the US market. In 2018, President Trump imposed heavier tariffs on specific types of solar products.

Auxin’s complaint about Chinese interference has sparked a flurry of online comments and phone calls, many threatening to boycott the small producer and nearly all smearing the company.

“Shame on you for endangering the jobs of hundreds of thousands of Americans and for trying to cripple the future of green energy infrastructure,” a Google post bed.

Auxin’s petition threatens one of the few industries that has flourished in the past two years, said John Miggins, who founded Harvest Solar Energy in Tulsa, Oklahoma, in 2002, doing mostly domestic installations.

“The big picture is that we need solar,” Miggins said. He said his prices had risen, although record inflation played the biggest part in that. He echoed the solar industry’s response to Auxin’s complaint, saying it will make it harder to achieve the Biden administration’s rapid build goal.

“The end result is that it’s going to slow down people getting their own power system,” Miggins said.

In the past, solar energy advocates have advocated the complete abolition of tariffs on solar parts from China, claiming that “tariffs are ineffective in increasing solar energy manufacturing capacity.” Sen. Jacky Rosen, a Nevada Democrat, in February introduced a bill to repeal Trump-era tariffs. The bill has not moved since its introduction.

America’s solar industry can move forward without China, Tracy Stone-Manning, director of the Bureau of Land Management, told NBC News in April.

“I have incredible confidence in American ingenuity,” said Stone-Manning, whose agency manages thousands of acres of the Southwestern desert being developed for solar power plants. “If we have to, we’ll start building the solar panels here.”

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