Solar crisis hits Maine as investigation into Chinese panel manufacturers puts projects on hold
Hundreds of large-scale solar power projects are on hold in the U.S., while federal trade officials investigate whether Chinese manufacturers and affiliates in Southeast Asia illegally avoided duties on solar panels. Some see the situation as a threat to President Biden's climate agenda.
Lately some of Maine's gently rolling hills have been sprouting long rows of solar arrays. Recent state climate policies and incentives are driving a renewable energy boom. The procurement manager for this 35-acre project in Augusta, Leo Azevedo, said even the mowing service avoids fossil fuels.
"You might have seen some droppings at the entrance of the site," Azevedo said. "So we have a local sheep farmer, that brings his sheep to graze on the grass."
This array was developed by partnership called BNRG Dirigo Solar, and it can power around 1,500 homes. It was built thanks to a solicitation for renewable energy mandated by the legislature. And thanks in part to cheap solar panels from Southeast Asia, that electricity will cost consumers a good deal less than fossil-fuel energy sources.
But just across the fence, a bigger project that would provide Mainers even cheaper electricity is on hold.
"So right now most of the panel manufacturers aren't actually taking orders," Azevedo said.
That's because the Department of Commerce is investigating whether Chinese panel manufacturers avoided duty requirements by funneling components through affiliates in nearby countries, such as Vietnam and Malaysia. Azevedo said if commerce finds violations, it has wide latitude to assess duties retroactive to the investigation's start in April.
"Worst-case scenario, you can think about retroactive tariffs of up to 240 percent. But we really don't know what it is. So there's just too much risk to order panels right now, and that's just the end of it," he said.
In a recent industry survey most U.S. solar developers said uncertainty was causing delays and cancellations, putting billions of dollars worth of carbon-free energy capacity at risk. That includes 220 megawatts worth of planned solar arrays in Maine — as much as was installed in the record year of 2021.
"The investigation alone is wiping out a decade of solar job growth. It's stunning," said Abigail Ross Hopper of the Solar Energy Industries Association. She said as many as 100,000 jobs are at stake. At a time, she added, that was supposed to be the green economy's moment in the sun.
"We have a president who believes in climate change and addressing the crisis. We have a House and Senate that are controlled by Democrats. And our industry is growing exponentially. And there is so much we can do to help address so many of the challenges that we have," she said.
The problem's scope is still emerging. An Indiana utility said it has to postpone several solar projects - and keep a coal-fired plant running years longer than planned. But last week three midwestern utilities said they foresaw only a short-term delay in solar buildout.
"Yes doom and gloom scenarios are out there. I've seen all the headlines," said Mamun Rashid, CEO of Auxin Solar, the small California panel-maker that petitioned the government to level the solar-panel playing field. Rashid's since been condemned by many in the industry, but, he said, fair trade is fair trade.
"I think the business models will need to be reassessed and will be reassessed," Rashid said. "No one is going to walk away from hundreds of millions or billion dollar businesses."
But for now, the sector's recent surge is sputtering. Planned solar installations of all types — residential rooftop, community-scale and grid scale in Maine could be slowed or stopped.
At the Maine solar plant, procurement manager Leo Azevedo says The BNRG — Dirigo partners have planned projects here and elsewhere that together could power tens of thousands of homes, carbon-free - and produce hundreds of construction jobs too.
"You're talking about 200 to 300 megawatts in the next three years year that's at risk. So that's jobs in North Carolina, Virginia, Ohio, and Indiana. So that's a lot of jobs, a lot of cheap electricity that is just in jeopardy," Azevedo said.
"As you can see the weather outside is beautiful, but nothing's going on," said construction supervisor Adam Farkes, as he gives a wistful look to the untouched site next door, where pre-construction work should already be starting.
"It seems a little bit counterproductive to have these goals for climate change and then at the same time you're not letting us build anything. We should be building," he said.
The chairman of Maine’s Public Utilities Commission says that if solar projects like this don’t get built or can’t meet their price targets, the commission can reopen its mandated bidding process for utility-scale renewable energy.
Federal investigators are expected to make a preliminary finding on panel imports in August. The solar industry and its political allies are calling for a speedier review.
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