The President has invoked the Defense Production Act to allow increased manufacturing of solar panels in the United States and Southeast Asia. The move also grants a two-year tariff exemption on solar panels imported from those countries. The move is meant to jumpstart the industry. Industry groups, however, have complained about supply chain problems and a federal investigation into potential trade violations involving Chinese products. Regardless of the motives of President Joe Biden’s move, it is clear that he is trying to jumpstart the solar industry.
First Solar says that if Biden waives solar panel tariffs, American solar manufacturing will be undermined. The action would restore business certainty and predictability, but there are challenges ahead. Let’s take a look at why this action would help solar manufacturing. And what are the challenges to it? Let’s look at what might happen if Biden does waive solar panel tariffs. Interested in the details?
Boosting domestic production of solar panel parts
President Joe Biden has acted on his executive powers to promote domestic solar panel manufacturing. The president is using the Defense Production Act to authorize a tariff exemption for solar panels from Southeast Asia for 24 months. By leveraging the federal government’s massive purchasing power, the president is giving U.S. manufacturers a boost and creating demand for American-made goods. Additionally, the president is using his power to give US companies a guaranteed buyer for solar products.
President Biden has signed a series of executive actions meant to promote the domestic development of clean energy technologies. The president has directed the Department of Energy to increase manufacturing in the United States of solar panel parts, building insulation, and heat pumps. The president is also directing the Department of Energy to expand the manufacturing of fuel cells and other components of power grid infrastructure. This is a welcome move for the solar energy industry, which has seen a slump in recent months as a result of the Commerce Department’s inquiry.
The new tariffs are intended to help domestic manufacturers compete with foreign suppliers. President Biden’s action neutralizes the threat of retroactive tariffs that threatened the nationwide deployment of renewable energy resources. Biden’s action will also help restart stalled solar projects and seeks to boost production. However, the president’s decision to suspend the solar tariffs will also stall other White House efforts that could have targeted Chinese companies for trade violations.
Increasing domestic production of lithium
As the world increasingly looks to clean energy and electric vehicle batteries, lithium’s strategic importance will continue to grow. Whether the Biden administration will focus on increasing domestic production or seek to expand partnerships in the region, the lithium industry will play a key role in future technology and clean energy. As a result, it may become a source of geopolitical tension between the United States and China. However, the Biden administration should not focus exclusively on this issue.
Using the Defense Production Act, Biden is urging the administration to increase domestic production of lithium and other critical minerals. In the past, the Defense Production Act has been invoked to boost the production of COVID-19 vaccines. The new bill will also help increase the domestic production of lithium, nickel, cobalt, graphite, and manganese for use in batteries for electric vehicles. The Defense Production Act also enables the president to make large orders for these minerals that can be used for military purposes.
The Biden administration could also organize a lithium-production forum with international partners in the region. Lithium is an essential component of clean energy technologies, and the United States should collaborate with countries located in the Lithium Triangle to maximize their production. In the meantime, the Biden administration should engage the governments of Argentina, Bolivia, Chile, and Canada in such a meeting. Since the Biden administration is often focused on climate change, it is imperative that they approach this region with a broader perspective to maximize benefits.
Boosting domestic production of other clean energy technologies
President Joe Biden has taken a number of executive actions to boost domestic production of clean energy technologies. The Defense Production Act was invoked to exempt solar panels from tariffs for two years. Biden’s plan also includes incentives for higher labor standards and community-based clean energy. The White House calls this a “bridge measure” to increased domestic production. Despite the difficulties that the solar supply chain has encountered, Biden is taking action to make the process easier for American consumers.
As part of the plan to make American manufacturing easier, President Biden authorized the Department of Energy to use the Defense Production Act to expedite the domestic production of solar and other clean energy technologies. In addition to using the DPA, Biden authorized DOE to use its procurement power to increase solar production and strengthen supply chains. The President will continue to push for federal funding to support these efforts. The bipartisan agreement is an important step in the right direction.
The Biden administration has taken bold steps to increase domestic manufacturing and supply chains of clean energy technologies. This will strengthen national security while helping American families save money on their energy bills. Additionally, more clean energy products and technologies will be manufactured in the United States, creating union jobs in the process. The Department of Energy will also encourage recipients to use strong labor standards and local hiring provisions. This will help the US develop a more sustainable energy system.
