U.S. political landscape and solar policy trajectory

With a presidential election looming in late 2024, the world’s second-largest PV market draws global attention. The following paragraphs look into U.S. PV policies under Democratic and Republican administrations, charting future trajectory of its energy policies. 
 

Trump, Republican: from January 2017 to January 2021

Current trade barriers against PV products focus on Chinese imports. Besides the Antidumping and Countervailing Duties (AD/CVD) that came into law in 2012, Trump began setting punitive tariffs on the occasion of the U.S.-China trade war in 2018. 

In January 2018, the Trump administration announced tariffs on cell and module imports under Section 201 of the Trade Act of 1974 (Section 201), exempting a few developing countries. Section 201 tariffs began at 30% in 2018 and declined by 5% annually, with a tariff rate quota (TRQ) of 2.5 GW per year for cell imports.

In June 2019, Section 201 excluded bifacial modules. However, the Republican White House had been inconsistent with this matter, re-imposing tariffs on bifacial modules in October 2019, followed by several ons-and-offs of the exclusion. In October 2020, Trump issued Proclamation 10101 to revoke the exemption and to raise tariff rates from 15% to 18%. In November 2021, the Court of International Trade (CIT) the moves, citing “an action outside the president’s delegated authority.”

In July 2018, Trump imposed duties on a wide range of imports using Section 301 of the Trade Act, with a tariff rate of 25% for cell and module imports. The tariffs expired automatically four years after the imposition.
 

Biden, Democratic: from January 2021 to January 2025

Instead of reducing trade barriers, Biden extended both Section 201 and Section 301 tariffs, signed the Uyghur Forced Labor Prevention Act (UFLPA), and initiated anti-circumvention inquiries on solar products from Southeast Asia. In addition, his Inflation Reduction Act of 2022 (IRA), became the biggest US climate bill in history with a whopping $369 billion budget for renewable energy.

In February 2022, the Biden administration reduced the rates of Section 201 tariff to 14.75% with a 0.25% drop each year through the extended end-date of February 6, 2026, increased the TRQ for cells from 2.5 GW to 5 GW, and continued excluding bifacial modules. As for the Section 301 tariff previously set to expire in 2022, the Biden administration started reviews in May and maintained the Trump-era tariff. In June, the UFLPA took effect, mandating importers to provide adequate documentation certifying the imported products do not, wholly or in part, involve production in Xinjiang.

In March 2022, the U.S. Commerce Department launched anti-circumvention investigations against cell and module imports from Malaysia, Vietnam, Thailand, and Cambodia to prevent Chinese manufacturers from evading tariffs by relocating production to Southeast Asia.

According to the regulation, cells and modules that Chinese manufacturers make in Southeast Asia are considered China-made if produced based on wafers of Chinese origins, while those made of non-China wafers (even containing China-origin polysilicon) are not subject to anti-circumvention duties. 

In August 2023, the Commerce Department issued final rulings, affirming previous findings in most respects, concluding some manufacturers operating in Cambodia, Malaysia, Thailand, and Vietnam circumventing the AD/CVD duties on a country-wide basis. These manufacturers will be subject to of AD/CVD tariff rates as high as 254.19%. Still, authorities granted a two-year grace period (from June 2022 to June 2024), during which manufacturers can import or adjust their supply chains to avoid future levies.

In addition to trade barriers, Biden signed the IRA into law in 2022, setting a milestone for the U.S. renewable energy development. Under the IRA, the Biden administration introduced incentives for both the demand and the supply sides of the PV industry. For project developers, there are Investment Tax Credit (ITC) covering initial investment and Production Tax Credit (PTC) allocated based on power generation. Project developers can receive higher ITC and PTC tax credits by meeting labor and domestic content requirements. For manufacturers, the Advanced Energy Project Credit (48C) program covers plant construction and equipment costs, and the Advanced Manufacturing Production Credit (45X MPTC) is distributed based on sales volume.


 

Comparisons and directions

From Trump’s “America First Energy Plan” to extend traditional energy development and lift methane regulations, to Biden’s return to the Paris Agreement and push for renewable energy, the U.S. has two approaches towards climate issues, the republican one that braces traditional energy and the democratic one that opts for renewable energy.

The IRA is the center of the divergence. In 2023, House Republicans passed the Limit, Save, Grow Act and the Build It in America Act, both to reduce, or even terminate investments in renewable energy under the IRA and redirect the budget to traditional energy sources. The bills are still under review in both chambers of Congress but likely to be rejected by the Democratic-led Senate and Biden. Meanwhile, backlashes from Republicans against the IRA, as it is an epicenter of Biden’s agenda. Trump, running again for the presidency this year, repeatedly claimed his intention to ditch the IRA once elected, while Biden reinstated the importance of the act.

Contrastingly, the Biden administration displays consistency with the “America First” framework of the Trump era. Biden granted a two-year exemption of anti-circumvention tariffs and loosened up investigations under the UFLPA but only to address the short-term shortage in the U.S. With the IRA supporting local PV industry, both Republicans and Democrats agree that trade barriers will accelerate reshoring manufacturing.

The continuous development of renewable energy, including solar, as well as future trajectories of the IRA hinge on the outcome of the presidential election. Either way, the course of the nation will not deviate from protectionism and the goal of decoupling its supply chain with China.