“This is Wreaking Havoc on our Business”: Companies Share Stories About the Impact of the Auxin Tariff Petition
Tuesday, Apr 19 2022
In a bewildering act that runs counter to President Biden’s climate goals, the U.S. Department of Commerce is investigating whether to impose another set of tariffs on the solar industry. Since the Department of Commerce’s decision in late March, the American solar industry has ground to a halt, all at the behest of one, self-interested company that filed an anti-circumvention petition for solar imports from Cambodia, Malaysia, Thailand, and Vietnam.
As a result, the 231,000 Americans and 10,000 businesses that power the U.S. solar industry are bearing the brunt of this decision. These companies, the majority of which are small businesses, are the ones that will ultimately be shouldered with this burden.
The Solar Energy Industries Association (SEIA) conducted an industry-wide survey to measure the catastrophic impacts of the Commerce Department’s decision. To date, more than 600 clean energy companies from across the country shared heartbreaking stories about their new reality as this investigation ripples across the industry and looms over their lives.
These are their stories.
Workers in the Solar Industry Fear for Their Livelihoods
Solar business owners and employees are deeply concerned about their livelihoods and their ability to support their families as a result of the Commerce Department’s investigation. A single mother that has worked in the solar industry for more than a decade wrote that the decision “puts me in a state of panic about how I will survive and provide for my child.”
Another survey respondent cited that they started their solar business so they could do the right thing for their kids’ future. Just when they felt that they could grow their business to help build a clean energy future, this decision has put their hopes on hold.
According to another business owner, the threat of tariffs “puts a complete stop in our workforce, our business model, and is sure to destroy the careers and livelihood of all of us here.” These are hardworking Americans trying to provide for their families, but a single company’s self-interested petition has jeopardized their ability to make a living.
Jobs and Community Investments Are Put on Hold
As solar companies try to weather the immediate impact of this decision, they have had no choice but to freeze hiring and delay projects. One company that primarily serves low-income communities reports that they “put all of our existing business on hold until there is clarity.” Another company anticipates that they will have to lay off most of their workforce as a result of the Commerce Department’s investigation.
The effects will also trickle down to local businesses that partner on community-based projects. One company believes this decision will hurt local subcontractors that provide everything from fencing to civil engineering work on project sites. In New Mexico alone, another company expects that 1 gigawatt of solar capacity will be cancelled, sacrificing 1,400 construction jobs.
Across the country, SEIA estimates the solar industry will lose 70,000 jobs, which will be a major blow to the communities they serve.
High Prices Wreak Havoc on Bottom Lines
The decision is also exacerbating high prices in the solar industry, which have been on the rise over the past year, due to a myriad of supply chain challenges.
“This is wreaking havoc on our business,” says one survey respondent, who reported a 35% increase in solar module prices and significant inflation on other materials. To make matters worse, manufacturers are cancelling their purchase orders because they do not have inventory to ship at the agreed-upon prices. Another company anticipates that their profitability will nosedive, “which has already taken a huge hit due to price increases across the board in the last 6 months.”
Businesses cannot succeed with continued price increases that affect their profit margins. Every day that this investigation continues, companies will struggle to get by.
Small Businesses Fear They Will Shut Their Doors Forever
Small businesses in the solar industry are especially vulnerable given the challenges already facing the industry. With the added threat of tariffs, they rightly worry that things will get worse.
“This situation is devastating to every small business in the industry,” writes one survey respondent. Another mom-and-pop sales organization fears, “this will completely destroy my business.”
One young startup that serves low- and moderate-income consumers is concerned that this action will “be the final blow that causes us to shut down.” Despite having financing in place to deploy 100 megawatts of solar, they have faced too many obstacles over the past year from supply chain disruptions to trade uncertainty. “There's just not enough margin left to support our small team and certainly no way to build capital to support growth.”
America needs a rapid clean energy transition to tackle climate change, but the uncertainty from this baseless petition will make it impossible for the solar industry to meet President Biden’s climate goals.
Every day that this investigation continues means more heartbreaking stories of layoffs, project cancellations, and shuttered businesses that could be powering our clean energy future.