By Guy Page

Just three days after the parent company of Vermont solar power installer SunCommon declared bankruptcy, the Biden administration closed a major tariff loophole in Chinese solar panels. 

On June 6, the Biden administration as promised a month earlier removed its tariff exemption on ‘solar bridging,’ in which China sells solar parts to other countries for assembly and eventual duty-free sale in the U.S.A. 

The solar bridge tariff may impact not only SunCommon, Vermont’s largest solar power installer, but the entire state and national solar installation industry heretofore reliant on relatively cheap solar panels assembled in Asian companies with components manufactured in China. 

Due to the closing of the solar bridge, Vermont’s solar power installation industry must either pay the ‘toll’ at the bridge, or ‘detour’ to another source of solar panels. Either way, the added cost will be reflected in consumer pricing.

iSun, formerly Peck Electric, purchased SunCommon for $40 million in 2021. On June 3 it filed for bankruptcy, owing large sums to Vermont utilities and vendors. The reasons given included rising interest rates, falling Vermont solar power subsidies, and the added burden of paying the $40 million purchase cost. 

Not mentioned at the time, but perhaps significant in retrospect, is the June 6 end of a significant loophole in tariffs on solar power panels and equipment manufactured in China.

In early May, the Biden administration announced increased tariffs under Section 301 of the Trade Act of 1974 on $18 billion of imports from China – including by doubling the tariff rate on solar cells and modules from 25% to 50%.

On May 16, the administration: 

1. Imposed tariffs on ‘bifacial’ utility-scale solar panels exempted under Section 201 of the Trade Act of 1974. 

2. Ended the controversial solar bridge in which China sold solar parts to other Asian countries, which then exported finished panels to the U.S.A. In June 2022, President Biden initiated a temporary, 24-month tariff exemption to facilitate panel imports from Cambodia, Malaysia, Thailand and Vietnam duty-free “to ensure robust deployment while the domestic solar manufacturing base ramped up,” an administration statement said. 

The bridge – essentially a tariff loophole highly popular with solar installers like SunCommon – ended June 6. Producers in Southeast Asia that have been found to be circumventing antidumping and countervailing duties on solar manufacturers from the People’s Republic of China (PRC) will be subject to those duties. 

Panels imported duty-free under the ‘solar bridge’ must be installed within 180 days to prevent stockpiling. Customs and Border Protection (CBP) has announced that it will vigorously enforce this provision, including by requiring importers to provide to CBP a certification of solar module utilization with detailed information about the modules being deployed.