Hit ’em with a DPA... President Biden is shining light on the solar industry with his latest executive actions. The White House has authorized the Defense Production Act to rev up US manufacturing of solar panels and other clean-energy components. Refresher: the DPA lets presidents order companies to produce critical things in short supply (think: masks, baby formula). In this case, it’s energy: oil and gas supplies have been strained since Russia's invasion of Ukraine, so boosting renewables might help.
- The White House also announced a two-year suspension of tariffs on solar panels imported from Cambodia, Malaysia, Thailand, and Vietnam — which together supply ~80% of America's solar products.
- Why those tariffs were sweat-inducing: An ongoing federal investigation into whether those countries are using materials from China has stalled much of the US solar industry, which is worried about having to pay hefty retroactive tariffs. Hundreds of US solar projects have been scrapped since the probe began in March.
Just add "sun"... Solar stocks like Sunrun, SunPower, SolarEdge, and Enphase Energy spiked yesterday as investors welcomed the tariff suspension, which the solar industry had been lobbying for. But not everyone’s thrilled: US manufacturer First Solar and others that weren't directly threatened by the investigation said the suspension was a loss for American manufacturing. First Solar sank 4%.
Solar needs an energy injection… After Biden got elected, there was optimism that the Dems would incentivize federal and private solar spending. That sunny vision died last year when Biden’s Build Back Better bill, which featured $500B+ in climate-related spending, stalled in Congress. Fewer than 5% of US homes use solar energy, and installation prices have risen as trade policies caused uncertainty and supply constraints. Cutting tariffs is a roundabout way to revive renewables.