Renewable power developers blasted a US government decision that will slap new tariffs on solar exports from Southeast Asia, saying the move will slow clean energy deployment and harm climate progress.

“We’ve gone from toasting the anniversary of the Inflation Reduction Act and its positive impacts on America’s energy transition to lamenting the imposition of harmful solar tariffs that will severely constrict solar availability in the US,” Gregory Wetstone, president of the American Council on Renewable Energy, said Friday in an interview.

At issue is the conclusion of a 17-month Commerce Department trade probe that found some solar manufacturers are using Southeast Asian processing to dodge duties designed to counteract Chinese subsidies and below-market pricing. As a result, some solar cell and module exports from Cambodia, Malaysia, Thailand and Vietnam — nations which represent roughly 75% of US supply — will be hit with varying tariffs beginning early June.

The investigation, triggered by a request from California-based Auxin Solar Inc., pitted two core Biden administration constituencies against each other: renewable developers eager to accelerate deployments and domestic manufacturers that argued they were unfairly being undercut by foreign rivals.

Minimize Disruption

Many US developers have already sought to shuffle supply chains to minimize disruption and were anticipating the outcome, following a preliminary ruling last December.

US solar manufacturing has been invigorated by incentives in last year’s climate law. But it will take time for that to ramp up and, in the meantime, the ruling “will perpetuate current supply problems,” said Abigail Ross Hopper, president of the Solar Energy Industries Association, which represents many developers.

“This case will just make it harder for American businesses to keep deploying, financing and installing solar power,” Hopper said, adding that the decision “is out of step with the administration’s clean energy goals.”

President Joe Biden already tried to soften the blow for domestic solar installers and power companies last year when he waived any resulting duties through June 6, 2024. Commerce’s ruling allows Southeast Asian manufacturers to steer clear of the new duties by ensuring modules using Chinese wafers only contain two other specified components from China.

The Commerce Department ruling “allows China to avoid future duties by constructing wafer facilities outside of China,” the Coalition for a Prosperous America said on its website. The group, which champions domestic production, decried the approach as “a loophole” that will allow Chinese solar manufacturers to avoid duties indefinitely.

The administration was “in an unwanted bind from day one,” TD Cowen said in a research note. As a result, the final decision and remedy “represents the ‘least bad’ outcome for the administration.”