U.S. solar suffers another hit as Dept. of Commerce investigates solar cell imports.

The solar industry in the U.S. is, by all accounts, frozen right now. 

Reports of more than 300 utility-scale solar projects have been stalled or delayed in recent weeks, and solar installers across the country are nervous this crawl could last for an extended period. Many companies have reported the likelihood of layoffs. The next six months will reveal whether or not this is hyperbole. 

The problem is that, following a complaint from a Santa Barbara, California solar company, the U.S. Department of Commerce has launched an investigation into solar cell imports coming from Cambodia, Malaysia, Thailand, and Vietnam. The government has reason to believe that the crystalline silicon photovoltaic cells coming from those countries are actually coming from China, thus avoiding the heavy tariffs that the U.S. has placed on Chinese solar products. 

The DOC is expected to publish preliminary results from the investigation in August, with a final decision by Jan. 2023. What a "final decision" looks like could vary, but the government has not ruled out a retroactive tariff on the solar products, a decision that would further harm U.S. solar companies already damaged by the delay caused by the investigation. According to law firm McGuire Woods, roughly 80% of these photovoltaic cells used in the U.S. are imported  from Thailand, Malaysia and Vietnam. 

Tariffs on Chinese solar products have been in effect since 2012, when then-President Barack Obama levied the taxes in hopes to boost domestic solar manufacturing and challenge China's world dominance in the industry. President Donald Trump raised the taxes and President Joe Biden extended the tariff schedule in February. Yet, the government believes the Chinese government has potentially been able to subvert the heavy tariffs by selling the products first to companies in four Southeast Asian countries. 

If the U.S. decides to levy heightened tariffs on solar cells coming from the Southeast Asian countries, it would certainly create waves in the domestic solar market, as cell module costs are already a significant portion of total project cost. Any cost increases could harm already-planned projects. While it's clear to see how this situation might delay the country's efforts to battle climate change and reach a clean grid, it also clearly harms the industry and the economy at large. 

This could be a critical hit to utility-scale solar, but the investigation comes at a time while residential solar is already taking a hit, especially here in California, where the Public Utilities Commission is considering rolling back financial incentives for residential solar customers.