The Biden administration has turned its focus to solar and clean energy, instead of funneling resources to alleviate the pain of soaring gas prices in the U.S.
President Joe Biden said yesterday that he will employ the Defense Production Act’s wartime authorities to boost solar equipment production and domestic clean energy manufacturing. Tariffs on solar panels and components from four Southeast Asian countries will also be frozen by the administration.
According to manufacturers, that cash, even if fully dedicated to solar production, would only be enough to establish a few factories capable of producing a fraction of the panels the US presently imports each year.
Climate activists and environmental groups hailed the news, who have urged the White House to be more forceful as its climate program faces opposition in Congress.
“Even if they spent all of that on solar panels, it’s a pittance,” said Nick Iacovella, a spokesman for the pro-manufacturing Coalition for a Prosperous America.
The president’s new solar initiatives may not even receive federal funding. Other supply shortages and national-security considerations may require the use of the same pot. The administration is anticipated to ask Congress for more funds.
Biden used broad powers granted by the Cold War-era Defense Production Act on Monday to help the United States manufacture a range of key energy technology, including solar panels, fuel cells, and heat pumps. He paired the statements with a two-year exemption from new duties on solar cells and modules from four Southeast Asian countries, in an effort to resolve a trade spat that has stifled renewable energy projects across the US.
“A tremendous sea change in the Biden administration’s approach to climate action,” said Jean Su, a senior attorney at the Center for Biological Diversity who has regularly chastised the government for being too timid.
“Previous to this, they were very much focused on legislation and now we’ve asked, and Biden has answered, the very dire call for the use of executive powers,” she said. “This is the strong signal that we’re seeing from him that he’s willing to use those executive powers now to get off fossil fuels.”
Analysts predict that the US solar business will take months to recover from a Commerce Department probe into whether Chinese companies were evading tariffs by selling modules and other equipment to the US through Cambodia, Malaysia, Thailand, and Vietnam.
As the probe progressed, factories in those Southeast Asian countries reduced production or redirected supply, according to analysts. The probe, according to Wood Mackenzie, is expected to reduce solar installations in the United States by around 30% this year.
This year, over 6 gigawatts of new solar projects were projected to be delayed. According to Michelle Davis, a Wood Mackenzie solar expert, the announcement suggests that 2 to 3 GW of those stalled projects may now be built.
She said total U.S. solar installations are likely to fall from 24 GW last year to around 15.5 GW this year.
“It is going to take time to ramp back up,” she said.
In a research report released Tuesday, Bank of America called Biden’s industrial move as “more rhetoric.” “Feedback from a variety of stakeholders suggests it isn’t a silver bullet.”