Trump Administration Withdraws Tariff Exemption for Bifacial Solar Modules

The Office of the United States Trade Representative (USTR) has withdrawn the exclusion of bifacial modules from the ambit of safeguard measures that was applicable on imported solar equipment. The change in policy will take effect as of October 28, 2019, and the bifacial modules will now incur a 25% duty.

According to the USTR, it evaluated the exclusion after consultation with the secretaries of commerce and energy and concluded that it would undermine the objectives of the safeguard measures announced last year.

Further, the USTR also modified the Harmonized Tariff Schedule of the United States (HTSUS) to withdraw the exclusion of bifacial solar panels from the application of the safeguard measure. The USTR has also modified the HTSUS to make certain technical changes in connection with the safeguard measure.

USTR received several inquiries, requests, and other comments from members of the public about the exclusion that was announced. Many comments mentioned that the exclusion on bifacial solar panels was broader than the category of products described in the exclusion requests submitted on March 16, 2018. These comments also suggested that the exclusion will cause a significant increase in imports of bifacial solar panels. It is expected that the manufacturing capacity of bifacial modules is expected to increase around the world, and they could potentially compete with domestically- produced mono facial modules.



‘This move by the Trump administration is part of the larger trade war with China. It will not be surprising if things change again in the future if a broader trade deal is reached between the two countries. Bifacial solar is here to stay for the long-term as prices drop, efficiencies increase, and project economics make sense. Although, in the short-term, there will be challenges as manufacturers need to regroup to address this latest tariff,” said Raj Prabhu, CEO of Mercom capital group.

In June 2019, Mercom reported that the USTR passed an order exempting bifacial and a few other types of solar panels from the levy of newly imposed safeguard duty of 25%. Bifacial modules provide higher output in comparison to mono facial modules, and while experts believe that the former will flood the U.S. utility-scale segment until there is absolute clarity on the timeline of the exemption, this seemed like a stop-gap measure with interim relief.

Several module suppliers from China have been pitching bifacial modules to Indian solar developers because of its better output, but the cost has been a major impediment. Once prices become competitive, bifacial solar modules could be a good fit for large-scale solar projects in states like Rajasthan, which has the highest irradiation levels in the country.

Some Indian manufacturers have also recently announced bifacial manufacturing capacity to take advantage of the safeguard duty exemption on bifacial modules in the U.S.

Meanwhile, the United States President Donald Trump recently ended India’s designation as a beneficiary developing country, thereby ending duty-free status on approximately 2,000 products amounting to an estimated $6 billion, including solar cells and modules.

Image credit: Soltec