The industry is already in a panic. A recent report by the Solar Energy Industries Association found that 83% of US businesses surveyed that use or purchase solar panels expect cancellations or delays. And some CEOs fear the investigation could cause the industry to collapse — not entirely surprising given the United States’ heavy reliance on these countries for solar panel materials.
Indeed, approximately 80% of all solar panels installed in the United States are imported from Cambodia, Malaysia, Thailand and Vietnam. This reliance on other countries makes the United States vulnerable to continued disruptions in the global supply for an essential commodity that can help accelerate America’s transition to a clean energy economy.
Solar power is the fastest growing energy source in the United States and perhaps the country’s best hope for meeting its climate goals. By reducing the demand for fossil fuels, solar can help strengthen the economy by providing a stable source of solar energy rather than being subject to the limitations of drilling rigs, rapidly rising fossil fuel prices and imports from governments that do not share American values. .
A recent report from the U.S. Department of Energy found that solar power has the potential to generate up to 40% of the nation’s electricity by 2035. And according to Energy Secretary Jennifer M. Granholm , “…Solar, our fastest-growing clean energy source, could generate enough electricity to power every home in the United States by 2035 and employ up to 1.5 million people in the process.” Access to solar power is particularly important for low-income families who are least able to afford rising home energy prices and are less likely to have generators or other backup systems in the event of a power failure.
To meet national clean energy goals, the United States must develop robust manufacturing capacity to produce solar energy panels and components. It can do this by offering financial incentives to US manufacturers to help offset higher domestic production costs, which have been estimated to be 30% to 40% higher than imports.
Congress is already moving in that direction. For example, the Build Back Better bill passed by the House would extend and expand the investment tax credit and the production tax credit to encourage the production of solar panels. The tax credits are expected to reduce overall production costs, increase manufacturing efficiency, build production capacity, and provide continued production support.
These are important because they signal a long-term commitment to the growth of solar power in the United States and to American manufacturing. And they give solar investors the confidence they need to fund solar panel production facilities. Additionally, the Commerce Department should move quickly to complete its investigation to give the solar industry certainty on import prices until Congress agrees to a longer-term solution.
Congress still has time to act, but it is running out. Legislators are expected to agree to pass the tax credits before the end of the session. The nation’s clean energy goals are at stake.
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