SOLAR PHOTOVOLTAIC S SUPPLY CHAI N DEEP DIVE ASSESSMENT
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Manufacturing Tax Credit originally provided a 30% investment tax credit to 183 domestic clean energy
manufacturing facilities valued at $2.3 billion (DOE 2012). However, many of the tax credits awarded were
not claimed, either because rapidly changing market conditions led the awardee not to proceed or because they
were unable to generate a taxable profit.
ARRA also included the Section 1705 Loan Program, which expanded the authority of the DOE Loan
Programs Office (LPO). The LPO received 42 applications for solar manufacturing projects, performed due
diligence on 16, provided a conditional commitment to 5, and closed 4 transactions for $1.3 billion. Due in
large part to the significant time it took to close these transactions and the rapid reduction in PV module prices
over the same period, the 4 transactions were not successful, with two of the recipients going bankrupt and the
other two not moving forward with the loan.
The United States has also encouraged U.S. PV manufacturing using federal procurement. Part of this is
sim ply increasing domestic solar demand, helped by GW-level commitments by each of the armed forces. The
United States Agency for International Development (USAID) requires that at least 50% of renewable energy
technology procured be manufactured in the United States (CRS 2021).
At state and municipal levels, policies intended to support domestic PV manufacturing have included grants,
tax exemptions, land provision, and consumer incentives for purchasing domestic PV products (B. L. Smith et
al. 2021; Feldman, Smith, and Margolis 2020). Consumer incentives for locally-made or domestic products
have consistently been ruled to be in violation of international trade law (Trachtman 2019).
3.2.2 Tariffs
The United States has attempted to support domestic PV manufacturing through the implementation of several
tariffs over the past 10 years. Its first two sets of tariffs, in 2012 and 2014, were Antidumping and
Countervailing Duties (AD/CVD) placed on Chinese (and to a lesser extent Taiwanese) PV modules and cells.
This resulted in Chinese companies shifting manufacturing to Southeast Asian countries, while U.S. PV
manufacturing continued to contract, with many businesses closing or filing for bankruptcy.
The United States has also instituted AD/CVD on imported MGS. In 2018, the United States Department of
Commerce (DOC) instituted AD/CVD, ranging from 2% to 100%, on MGS coming from Australia, Brazil,
Kazakhstan, and Norway (Reuters 2018). In 2021, DOC determined that dumping was occurring in the United
States from Malaysia, Bosnia and Herzegovina, Iceland, and Kazakhstan. The United States International
Trade Commission affirmed that U.S. industry was injured as a result, leading DOC to institute tariffs up to
160% (U.S. International Trade Commission 2021; International Trade Administration 2021).
In 2018, the U.S. government put in place a 4-yea r safeguard tariff (Section 201 tariff) on nearly a ll imported
PV cells a nd modules, exempting the first 2.5 GW
dc
of PV cells to support domestic module assembly, plus
additional tariffs (Section 301 tariff) on Chinese products, including solar products. The Section 201 tariff,
which started at 30% and reduced to 15% in its fina l yea r, is credited with an increase in domestic PV module
assembly, though it has not resulted in expanded U.S. PV cell manufacturing. The tariffs are also credited as a
major factor in the recent scale-up of U.S. PV thin-film CdTe module manufacturer, First Sola r, which benefits
from the increased market price of competing c-Si PV modules.
From October 2020 until November 2021, modules that generated power when illuminated from either the
front or back surface (bifacial) were excluded from the Section 201 tariff. Bifacial modules are primarily used
in utility-scale PV systems. The bifacial exemption was retained when the tariff was extended for an additional
four years in February 2022, and the exempted cell quota was increased from 2.5 GW
dc
to 5 GW
dc
.