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There's a storm raging over solar energy in the US. And Joe Biden is at the centre of it. The US president has pledged to slash greenhouse gas emissions. And switching American homes and industries to solar power is a major part of the plan. The goal is hugely ambitious. At the moment, only about 3 per cent of US electricity is generated from solar panels. The Biden administration wants this to rise to as much as 40 per cent by 2035.
Hundreds of millions, maybe billions, of new solar panels will be needed. Where those panels will be built is at the heart of a controversy that has clouded US solar developments in recent months. The White House wants to tackle climate change. But it also wants to foster a made in America green energy transition that brings solar manufacturing and jobs to the US from places like China that currently dominate the market.
To jumpstart domestic manufacturing, Joe Biden in June triggered the Defence Production Act. It's a Cold war-era law that gives the federal government added powers to galvanise domestic output of certain products in order to bolster national security. The law, once used to turn out tanks and guns in times of war, is now being used to boost production of solar panels to combat climate change.
But at the same time, Biden also issued a 24-month tariff waiver on solar panels made in four southeast Asian countries. The move was a response to a months-long Department of Commerce investigation into whether Chinese manufacturers are dodging US import tariffs by setting up shop in Vietnam, Cambodia, Malaysia, and Thailand. Those countries accounted for more than 80 per cent of US solar panel imports last year. And they're vital to many US solar projects.
American solar developers argued that the investigation had effectively frozen solar imports because of the threat of high retroactive tariffs. Hundreds of solar projects around the country were put on ice this year. And one forecaster said new installations could drop by about half in 2022 and 2023.
The White House's approach has split opinion in the US solar industry. Solar project developers have welcomed the move. But US solar panel producers argue it allows China to continue flooding the market with cheap panels, undermining the president's efforts to build the green energy revolution at home.