America’s Manufacturing Revival Hangs in Balance as Solar and Storage Industry Gets Jolted Around
Wednesday, May 03 2023
In just eight months, the Inflation Reduction Act has done more to boost domestic manufacturing than any U.S. policy in the last three decades. No matter what your views on this legislation were going in, the evidence is clear: it’s working. The promise of American manufacturing and a clean, reliable, and resilient energy future is right around the corner.
In the eight months since Congress passed the Inflation Reduction Act, America’s solar and storage industry has already announced 26 new solar manufacturing plants and 10 new utility-scale energy storage factories. Each of these new manufacturing facilities will create hundreds of new jobs and deliver millions — and in some cases, billions — of dollars in private capital investment.
This is nothing short of a manufacturing renaissance in America. And we are just getting started.
By 2032, solar manufacturing hubs in the United States are projected to generate more than 80,000 careers. Solar products made by American workers and businesses will become the backbone of the American solar and storage industry’s supply chain. They will help launch a whole ecosystem of affiliated businesses. And those, in turn, will support our communities with good jobs and private investment.
But this vision will never become a reality if we continue to stand in our own way and trip up locally-owned American solar businesses. And that’s exactly what ill-advised and costly import tariffs have done —halting the development of major solar construction projects during a pivotal moment in the clean energy transition.
Last year, a small solar panel manufacturer in California filed a tariff petition with the U.S. Commerce Department, attempting to impose tariffs on solar components manufactured in Southeast Asia — which account for more than half of the U.S. solar panel supply. Within weeks of this petition becoming public, over 300 solar projects in the U.S. were canceled or delayed, and hundreds of companies were considering layoffs.
While the Biden administration correctly granted a two-year reprieve from these misguided tariffs, in many cases, the damage was already done. The Commerce Department’s misguided decision to even open an investigation into this case created major disruptions, stifled billions of dollars of investments, and threatened thousands of American jobs in the construction trades.
Last year, the solar and storage industry should have seen massive growth as consumer demand for clean energy kept increasing. That was especially true after Congress passed historic investments and tax incentives for clean energy in the Inflation Reduction Act. Instead, the supply chain issues caused by the ongoing trade battles delayed the near-term impacts of the new law and caused a 16% decline in solar installations in 2022.
Now, some members of Congress are trying to use the Congressional Review Act to repeal President Biden’s two-year solar tariff moratorium. If they are successful, it will cost 30,000 American jobs, including 4,500 manufacturing jobs, and put American solar companies on the hook for over $1 billion in retroactive duties.
The current two-year pause on tariffs provided locally-owned solar and storage companies with the certainty they need to continue building a clean and resilient electric grid, lower costs for families, and help us meet our responsibility on climate. It also built a bridge for our domestic solar component manufacturers to scale up their operations — with the help of new production tax incentives in the Inflation Reduction Act — and become competitive in the global market.
American manufacturing could reach the critical mass necessary to meet our domestic needs within the next 3 to 5 years. But for that to happen, we need our trade policies and regulatory actions to align with our nation’s urgent mission to become a global climate and clean energy leader.
In our fight against climate change, every minute matters. We shouldn’t let more confusion and uncertainty stop our efforts to combat inflation, reduce pollution, and drive down energy costs for American families.
We have the blueprint in place for American-made success in the solar and storage industry. It’s time for us to get out of our own way and let American solar businesses deliver a manufacturing revival and a healthy, affordable, and carbon pollution-free energy future.