With nine Democrats crossing the aisle, a joint resolution (S.J.Res.15) rolling back a two-year moratorium on tariffs on solar panels and cells from four Southeast Asian countries passed the Senate on Wednesday.

Following a 56-41 vote, the measure now goes to President Joe Biden, who intends to veto it.

The resolution passed in the House of Representatives on April 28, 221-202, with both Democrats and Republicans crossing the aisle. In that case, 12 Democrats joined the GOP majority, while eight Republicans opposed the measure.

Biden ordered the waiver on tariffs on solar panels and cells imported from Cambodia, Malaysia, Thailand and Vietnam in June 2022, after the Commerce Department announced an investigation into whether panels and cells from those countries contain components from China that would be subject to tariffs. (See Biden Waives Tariffs on Key Solar Imports for 2 Years.)

Because neither house is likely to muster the two-thirds majority needed to override a veto, the House and Senate votes and the resolution itself were mostly political posturing, giving Democrats and Republicans cover to appear tough on China and the solar industry’s ongoing reliance on overseas suppliers. About 80% of solar panels used in the U.S. come from the four Asian countries in question, according to the Commerce Department.

“We cannot continue to let China get away with laundering solar energy components through other nations with absolutely no consequences,” Sen. Joe Manchin (D-W.Va.), chair of the Senate Energy and Natural Resources Committee, said in a statement announcing his decision to vote for the resolution. “American manufacturers — some of the most innovative in the world — are more than ready to rise to the occasion and help realize the goals of the [Infrastructure Investment and Jobs Act] and the Inflation Reduction Act to onshore our energy supply chains.”

The other Democrats voting for the resolution in the Senate were Sherrod Brown (Ohio), Ron Wyden (Ore.), Bob Casey (Pa.), Jon Tester (Mont.), Debbie Stabenow (Mich.), Gary Peters (Mich.), John Fetterman (Pa.) and Tammy Baldwin (Wis.).

An analysis of the vote from ClearView Energy Partners suggested that “many of the key defections against party lines … came from notionally ‘at-risk’ members up for re-election in 2024.”

In response, both the administration and solar advocates have said that the moratorium was intended as a “bridge” to allow for the buildout of a domestic solar supply chain while also ensuring ongoing demand for solar projects is met.

“More than 90 GW of private sector investments in solar manufacturing have been announced since the president took office, with about half of that coming in just seven months since the passage of the Inflation Reduction Act,” according to a White House statement announcing Biden’s decision to veto.

A recent report from the American Clean Power Association (ACP) lists 26 new solar manufacturing facilities and another 10 factories for energy storage announced since the IRA was signed into law.

ACP CEO Jason Grumet called the congressional resolution “misguided” in the face of an “American solar industry [that] has announced billions of dollars in investments in domestic solar manufacturing and energy production facilities.”

“The attempt to impose punitive retroactive tariffs on U.S. companies would harm American workers and once again cede ground to China and other nations,” Grumet said in a statement released after the Senate vote. “Congress should work to protect existing clean energy jobs, not undermine a growing American industry that is harnessing abundant domestic resources.”

“Any legislation that threatens 30,000 American jobs and weakens our nation’s energy security to this degree should be dead on arrival,” said Abigail Ross Hopper, president and CEO of the Solar Energy Industries Association (SEIA). “Demand for American solar products far outpaces what we can build now. Curbing supply at this critical time will hurt American businesses and prevent us from deploying clean, reliable energy in the near term.”

The Clock Is Ticking

Prior to the passage of the IIJA and IRA, tariffs on Chinese solar panels and cells were not particularly effective in kickstarting a domestic supply chain. Even after former President Donald Trump approved the tariffs on Chinese solar panels and cells in 2018, the solar industry continued its dependence on Southeast Asian and Chinese manufacturers. Despite heavy lobbying by the solar industry, Biden extended the tariffs in February 2022, with an exemption for bifacial panels.

But the announcement of the Commerce Department investigation the following month threw the industry into a panic, with more than 300 projects delayed or canceled, according to SEIA. Biden’s moratorium, and the IIJA’s and IRA’s tax credits, finally provided the impetus for companies to start investing in new facilities in the U.S.

“The IRA unlocked the U.S. market for us,” said Scott Graybeal, CEO of Caelux, a California startup that has developed a new technology using perovskite, a nanomaterial, that could boost solar panel performance while cutting costs. “It’s been instrumental in shaping our business plan.”

A solar industry veteran who has worked in Southeast Asia, Graybeal expects to launch the company’s first products by the end of 2024. But, he said, imposition of tariffs could “impinge on plans for manufacturing expansion if there isn’t a healthy market.”

He also sees a potential knock-on effect that could make solar projects riskier and therefore harder to finance, which again could affect efforts to build out a manufacturing supply chain.

The ACP report notes that “in the last eight months, over $150 billion in domestic utility-scale clean energy investments have been announced. This amount is equivalent to five years’ worth of American clean energy investments, surpassing total investment into U.S. clean power projects commissioned between 2017 and 2021.”

But the onslaught of optimistic figures from the White House and solar advocates may not translate into an adequate domestic supply chain that is up and running by June 2024, when the current moratorium on tariffs on panels and other components from the four countries runs out.

The Commerce Department issued a preliminary finding in the investigation in December, stating that “certain Chinese solar panel manufacturers were indeed attempting to bypass the [tariffs] via transport through these investigated Southeast Asian partners.” A final decision has been pushed back from May to August, and while Biden has pledged to veto the resolution rescinding the moratorium, he does not intend to extend it.

In other words, the clock is ticking, and figures from solar industry analysts Clean Energy Associates (CEA) provided to NetZero Insider suggest that not all the recent announcements of new solar manufacturing will turn into factories employing thousands of U.S. workers.

A plant producing solar panels can be built and reach mass production within two years, according to CEA, but the upstream supply chain — specifically the factories needed for ingots and wafers, critical components for panels — could take three to four years. Standing up plants to produce the polysilicon needed for the ingots and wafers could take five years.

CEA expects that only about half the announced panel factories and 40% of cell production facilities will actually come online. Building a domestic source for ingots and wafers could be even more challenging, as U.S. companies simply do not have the necessary experience, CEA says.

The analysts expect only three of 20 announced ingot and wafer facilities to come online by 2027, and with IRA tax credits tapering off in 2030 and disappearing after 2032, they say, building new polysilicon plants may not pencil out.

A recent report from SEIA said that rebalancing the solar industry’s “dangerous overdependence on China for equipment and raw materials” would still require an “ethical global supply chain. … Allowing necessary and ethical imports to continue” as the U.S. builds out its own supply chain will be critical, it said.

Graybeal agreed that timelines will need to be staggered for the wafer and polysilicon supply chain in the U.S. “These are capital-intensive projects, particularly manufacturing polysilicon,” he said. “We’re going to have to go through a learning curve. …

“It will be easier to do modules; the next will be cells, and then further up the chain, getting into wafers and polysilicon manufacturing, that’s probably the more complex endeavor,” he said. “Building in the U.S. is more complicated than it is in certain parts of Asia. We have permitting requirements; environmental impact issues. … Often times these are local issues that need to be managed.

“We have to give it some breathing room,” he said. If and when tariffs are levied on solar imports from Southeast Asia, he would like to see them phased in over time.