WASHINGTON: Solar manufacturers are asking the US government to slap duties on US$12.5bil of imported equipment from South-East Asia, setting the stage for a sweeping trade probe that threatens to make power projects more expensive.

In petitions filed Wednesday, seven panel makers and polysilicon producers seek trade help to counteract what they say are unfair practices by overseas rivals. Their requests raise the prospect of tariffs as high as 271.5% later this year.

While another batch of tariffs could bolster US solar manufacturing - a priority for President Joe Biden - the move also threatens to heighten uncertainty for a renewable power industry needed to fight climate change and meet soaring electricity demand.

First Solar Inc, America’s biggest solar manufacturer, rose as much as 2% in intraday trading Wednesday.

Biden’s Inflation Reduction Act delivered tens of billions of dollars in subsidies for new solar factories. But the country still depends on imports from Asia for most of its panel supply - and domestic manufacturers argue the US government support has been undermined by other federal policies as well as a surge of cheap imports.

Those imports - worth US$12.5bil over the past 12 months - threaten “the existence of the emerging domestic solar manufacturing industry and the billions of dollars of US investments” in it, said Tim Brightbill, co-chair of Wiley Rein LLP’s international trade practice and lead counsel for the petitioners.

“All of the recent investment in US solar manufacturing - including billions of dollars worth from the Inflation Reduction Act - is now at risk.”

The complaints from manufacturers Convalt Energy Inc, First Solar Inc, Hanwha Qcells USA Inc, Meyer Burger (Americas) Ltd, Mission Solar Energy LLC, REC Silicon ASA and Swift Solar Inc focus on solar cells from Cambodia, Malaysia, Thailand and Vietnam. Those countries constitute about 80% of US panel imports.

The US solar makers, united as the American Alliance for Solar Manufacturing Trade Committee, want a government investigation - and duties ranging from 70.4% to 271.5% on the imports.

They allege the equipment is being sold at prices below the cost of production - and unfairly benefits from tens of billions of dollars in subsidies, including from entities of the Chinese government.

The petitions come months after a US government probe found Chinese companies were bypassing existing tariffs by assembling their panels in those nations.

Some renewable power advocates condemned the tariff push and asked the Biden administration to consider alternative solutions to address the manufacturers’ concerns.

“We are deeply concerned” the “petitions will lead to further market volatility across the US solar and storage industry and create uncertainty at a time when we need effective solutions that support US solar manufacturers,” the Solar Energy Industries Association, American Clean Power Association, Advanced Energy United and the American Council on Renewable Energy said in a joint statement.

Some developers have brushed aside concerns. John Ketchum, the chief executive officer of NextEra Energy Inc, said Tuesday he expected any new trade actions to be “very manageable,” in part because they are unlikely to halt deliveries.

 - Bloomberg