Auxin anti-dumping case ‘an affront to industry,’ says SOLV Energy CEO – pv magazine USA
SOLV Energy CEO George Hershman has joined photo magazine to give his views on the anti-dumping/anti-circumvention case.
Earlier in February, a new round of anti-dumping/anti-circumvention (AD/CVD) cases were filed against Malaysia, Thailand and now Cambodia. A small US-based panel assembler, Auxin Solar, with around 120MW of development capacity in the US, has added its name to the petition, reviving what is seen as a threat to solar development in national scale.
This comes just months after the Commerce Department denied an earlier similar request by an anonymous group of solar companies who asked for tariffs on a handful of companies that import modules. About 80% of US crystalline silicon modules are shipped from Vietnam, Malaysia and Thailand. Auxin says Chinese manufacturers are shipping cells to those countries to avoid paying tariffs that have been in place since 2012.
In this case, all crystalline silicon modules from each of the four countries could be subject to a tariff. Unlike the first case, this one is designed to focus on entire countries, rather than specific companies. This new petition adds Cambodia, as Auxin claimed that Chinese companies are moving their operations to the country in anticipation of the tariffs. Historically, Cambodia contributes less than 3% of all US imports of C-Si modules.
AD/CVD rates can reach 50-250%, a level of uncertainty that has rocked the US solar industry. “The rollout is frozen,” SOLV Energy CEO George Hershman said in an interview with photo magazine. SOLV is one of the largest utility-scale solar contractors in the United States, with a strong project pipeline of over 4 GW across the country.
Hershman said the uncertainty caused by these prices is just too much to digest in a large-scale solar project, where module prices can be 50% of the cost or more. SOLV projects can exceed $300 million, so a 50-250% tariff would impose between $75 million and $375 million in additional costs. This level of risk is untenable, which is why Hershman describes the case as “an affront to the solar industry.”
The effects of US market uncertainty may already be felt, as LG announced the closure of its solar module business and 550 MW module assembly plant in Huntsville, Alabama.
The clock is ticking
The petition was filed by Auxin on February 8and, and now the Department of Commerce has 45 days from the date to decide on the case. If passed, the AD/CVD tariffs would be retroactive to the case, levying huge tariffs on solar modules shipped from all four countries in the meantime.
“There’s no case law to back this up, it’s a baseless case. The wafer-to-cell conversion was determined to be the country of origin,” Hershman said.
Hershman hopes Commerce will dismiss the case, just as it did with the previous anonymous petition. His request: not to wait the full 45 days.
With the country aiming for lofty decarbonization targets and time running out, there is little time to frame the industry with such uncertainty, he said. Based on supply chain constraints alone, Wood Mackenzie lowered its utility-scale solar projection for 2022 by 33%, a steep drop of 7.5 GW.
On top of that, Hershman supports American manufacturing, but thinks tariffs aren’t the right path. “We need to align with legitimate industrial policy to support manufacturing in the United States,” he said.
According to Hershman, tariffs like those imposed by the Auxin case are temporary, short-term measures that won’t stimulate U.S. manufacturing in any meaningful way. Long-term certainty is needed for a company to move a manufacturing process to a new country. He called for an industrial policy like the Solar Power Manufacturing for America Act, includes many US-based manufacturing tax credits.
An earlier Build Back Better Act proposal included key industrial policy measures, before it was closed by Senator Joe Manchin (D-WV). The bill included targeted incentives for entire national value chains, such as solar module manufacturing and lithium battery recycling. Specifically, domestic production of PV modules would be incentivized at $0.07/W, cells at $0.04/W, PV wafers at $12/m², and polysilicon at $3.00/kg. Additional incentives have been added for solar trackers, blackouts, inverters from residential scale to utility scale. Manchin said he was open to discussions again but wanted the conversation to start “from scratch”.
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