N.M. Congressional Democrats Call On President Biden To Expedite Solar Tariff Investigation Impacting Jobs, Investments In New Mexico

WASHINGTON – U.S. Senators Martin Heinrich (D-N.M.) and Ben Ray Luján (D-N.M.) and U.S. Representatives Teresa Leger Fernández (D-N.M.) and Melanie Stansbury (D-N.M.) are calling on the Biden administration to make an expedited preliminary determination on a recently filed solar tariff petition with the U.S. Department of Commerce that is placing a strain on New Mexico’s solar industry and the workers that support it.

 

In a letter to President Joe Biden, New Mexico’s Congressional Democrats write that “Initiation of this investigation has caused widespread uncertainty and concern in New Mexico’s solar industry and has already halted planned solar projects across the state.”

 

report from the Solar Energy Industries Association (SEIA) found that the solar industry in New Mexico is projected to grow 240% in capacity over the next five years. However, significant delays in solar deployment could pose resource adequacy risks in the state, dampen job growth or lead to job losses, and weaken the state’s ability to meet a legal obligation to reduce greenhouse gas emissions by 50% by 2030.

 

If the investigation continues for too long, the lawmakers are warning that it “could severely limit the financing options for otherwise viable solar projects in our state. Reaching an expedited preliminary determination will mitigate these strains on New Mexico’s fast-growing solar industry.”

 

Read the full text of the letter below or by clicking here

 

Dear President Biden:

 

We are writing to you regarding initiation of the antidumping and countervailing duty (AD/CVD) circumvention inquiry requested in the Auxin Solar petition. Initiation of this investigation has caused widespread uncertainty and concern in New Mexico’s solar industry and has already halted planned solar projects across the state. We urge your administration to make an expedited preliminary determination in this matter and carefully consider the significant policy and legal ramifications of this petition.

 

In 2020, imported modules constituted 89% of U.S. supply, and Vietnam, Malaysia, Thailand, and Cambodia were the source of more than 80% of solar module imports, measured by capacity. Right now, the potential imposition of a 50% - 250% duty liability retroactively applied to April 1, 2022, has had two immediate impacts. First, vendors are simply refusing to fulfill orders because the threat of unknown tariffs has severely constricted panels available for purchase. Meanwhile, the primary U.S. manufacturer, First Solar, is sold-out through 2023. The second challenge is the uncertainty caused by the investigation. Developers need to forecast their expenses at least one to two years in advance, and the potential duty liability in this case makes this nearly impossible. This could severely limit the financing options for otherwise viable solar projects in our state. Reaching an expedited preliminary determination will mitigate these strains on New Mexico’s fast-growing solar industry.

 

A report from the Solar Energy Industries Association (SEIA) found that the solar industry in New Mexico is projected to grow 240% in capacity over the next 5 years.  However, significant delays in solar deployment could pose resource adequacy risks in the state, dampen job growth or lead to job losses, and weaken the state’s ability to meet a legal obligation to reduce greenhouse gas emissions by 50% by 2030.

 

New Mexico is moving with the sense of urgency required by the climate challenge, having already put in motion a wave of retirements of coal-fired power plants. The San Juan Generating Station (SJGS) was slated to retire this summer and replaced with four projects, including the Arroyo Solar and Storage, a 300MW Solar/600MWh battery energy storage system (BESS) in McKinley County. However, supply chain disruptions in 2020 have delayed these solar projects from coming online until at least year-end 2022. As a result, in February, Public Service Company of New Mexico (PNM), the state's largest electricity provider with more than 500,000 residential and business customers, announced that it would not have enough power to meet peak consumer demand in July and August 2022 and warned customers that they may face rolling blackouts this summer and in 2023. To cover expected shortages, PNM requested the Public Regulation Commission (PRC) to keep the San Juan Generating Station open until October. The uncertainty this investigation has created will likely place the San Juan replacement power project in jeopardy once again.

 

Additional delays to the four replacement solar projects caused by the uncertainty created by this case will further exacerbate the existing resource adequacy challenges facing New Mexico. These delays could also fundamentally undermine a key component of New Mexico’s energy transition strategy. In 2019, New Mexico passed a landmark bill called the Energy Transition Act. The law enabled utilities to speed up the retirements of coal plants and replace them with solar projects. Substituting solar for coal is an emergent model for financing coal-fired power plant replacement generation in the southwest.  However, these so-called “solar for coal swaps” require participation of renewable energy developers and related investors. Without market certainty, this promising approach to speed early retirements of coal plants is unworkable.

 

In New Mexico alone, it is quite possible that 1 GW total solar capacity is likely to be canceled or suspended indefinitely and $1.55 billion in investments will be lost due to the uncertainty spurred by the investigation. One individual company projects 1,400 construction jobs and 75 full time permanent jobs associated with just six solar projects hang in the balance. A prioritized and expeditious investigation into these concerning allegations would minimize the supply chain uncertainty faced by these projects.

 

The challenges facing New Mexico are shared by states nationwide. Following Commerce’s announcement to initiate this investigation, informal industry surveys indicate that more than 80% of responses from U.S. solar companies report delays or cancellations of panel shipments. A total cutoff from this supply of cells and panels may cause the loss of more than 70,000 jobs nationwide, including 11,000 unrealized manufacturing jobs. According to Wood MacKenzie, solar deployment may fall by 16 GW annually while this uncertain situation persists. For perspective on the magnitude of this impact, the U.S. installed a total of 23.6 GW of solar in 2021.

 

Given both the immediate and anticipated future impact on jobs and solar deployment in New Mexico and nationwide, we respectfully request that your administration make an expedited preliminary determination on this matter and carefully consider any negative implications. 

 

Thank you for your consideration.