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Key Takeaways | How Solar Industry Leaders are Addressing and Overcoming the US–China Trade War

The US-China trade war has caused a significant impact on the solar industry, and that impact is expected to grow. In this webinar, learn how solar industry leaders are handling the effects of the US–China trade war and how they are preparing for the future.

Our first webinar of this series featured McDermott Will & Emery partner Carl Fleming, Pine Gate Renewables Director of Regulatory Affairs Brett White, Vice President of Construction James Froelicher and Assistant General Counsel Jess Cheney.

Below are key takeaways from the webinar:

1. Withholding Release Order. The US Customs and Border Protection (CBP) issued a withholding release order (WRO) against Hoshine Silicon Industry Co. Ltd., a company located in China’s Xinjiang Uyghur Autonomous Region wherein all silica-based products made by Hoshine and its subsidiaries are to be detained at all US ports of entry. Because of this WRO, manufacturers have been moving outside of the Xinjiang Uyghur Autonomous Region in order to avoid being subject to it.

There have been numerous detentions of silica-based products at multiple ports across the United States, and it is expected that the detention of materials will continue. In order to combat this, suppliers and industry leaders are presenting documentation to show that the materials are not being produced from forced labor or Hoshine and its subsidiaries.

Although the WRO was expected to cause significant disruption, it is not having as large of an impact as feared because many suppliers had already left the Xinjiang Uyghur Autonomous Region.

2. Anti-Dumping and Countervailing Petition. Anti-Dumping and Countervailing Petitions filed in August 2021 requested that the US Department of Commerce (DOC) include additional tariffs against solar panel imports from Malaysia, Thailand and Vietnam. The petitioners requested additional tariffs ranging from 50% – 250%. The DOC has yet to decide whether to investigate based on the petition, however, the impacts of the petition are already being felt with disruptions to the supply chain. If the DOC were to investigate, the solar industry would likely see a severe slowing of projects in 2022 and 2023 as neither suppliers nor developers are willing to bear the economic risk of the potential tariffs.

3. The DOC and the Biden Administration. The DOC and the Biden administration are expected to make decisions regarding tariffs, as well as anti-dumping and countervailing duties, that will directly affect the solar materials supply chain.

The Biden administration hopes to increase the domestic supply of solar materials, however, domestic manufacturers currently only produce approximately 25% of the overall demand for solar materials. As a result, the solar industry cannot immediately divert to purchasing solar materials from domestic manufacturers as the supply simply is not available. As an incentive to increase domestic manufacturing, solar industry leaders hope tax credits can be offered to companies that manufacture solar materials.

The Biden administration is expected to decide whether the 18% tariff on imported solar panels [...]

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Electric Utility and Solar Advocates in Arizona Reach Compromise Rate Settlement for Rooftop Solar

The Arizona Public Service Co. (APS) and solar industry representatives and advocates have reached a settlement on rooftop solar compensation and rate design, following years of heated policy debate.  The settlement, which the Arizona Corporation Commission (ACC) is expected to vote on this summer, required compromise from both sides on a variety of issues.

Future Rate Design

The settlement nixes APS’s request for a mandatory demand charge on all residential and small business customers.  Instead, the settlement gives new solar distributed generation customers the option to choose between a time-of-use or demand-based rate.  Under the settlement, APS would compensate solar customers with an export credit rate of 12.9 cents per kWh.  APS initially proposed to cut compensation from the retail rate, which is approximately 13 to 14 cents per kWh, to the wholesale rate, which is only 3 cents per kWh.  The export credit rate will decrease by up to 10 percent annually.  However, customers will be able to lock in their rates for 10 years, providing some long-term certainty.

Current Net Metering Customers

The settlement will preserve existing net metering benefits for distributed generation customers who file an interconnection application before the ACC issues a decision in the case.  Those customers will be grandfathered in and continue to receive the full retail rate for a period of twenty years from the date of interconnection.

Utility-Owned Generation

The settlement allows APS to invest $10 to $15 million per year in AZ Sun II, a new program for utility-owned rooftop solar for low- to moderate-income customers.  The agreement puts a moratorium on new self-build generation by APS until 2022, excepting distributed generation, microgrids, and renewable generation.

What’s Next?

The settlement moves Arizona away from retail rate net metering and towards value-based solar rate design.  While solar advocates do not believe the settlement fully recognizes the value of solar, the settlement preserves benefits for existing customers and allows the state’s solar industry to move forward with more certainty.  APS, industry representatives, and many solar advocates committed to stand by the settlement agreement and refrain from seeking to undermine it through ballot initiatives, legislation or advocacy at the ACC.




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