After months of speculation over actual and potential disruption to the U.S. solar market stemming from the U.S. Department of Commerce’s pending investigation into circumvention of duties by solar panel manufacturers in Cambodia, Malaysia, Thailand, and Vietnam, the White House declared an emergency on June 6, 2022 and directed the Secretary of Commerce to consider using emergency powers to permit solar panel manufacturers to import panels from Cambodia, Malaysia, Thailand, and Vietnam free from any circumvention duties for up to two years. The President directs the Secretary of Commerce to consult with the Secretary of the Treasury and Secretary of Homeland Security before making any decision.
As a practical matter, given the declaration of emergency and the clear preference of the President, it is likely that the Secretary of Commerce will decide to allow the importation of panels from Cambodia, Malaysia, Thailand, and Vietnam free from circumvention duties until June 2024. The EO excepts solar panels from Cambodia, Malaysia, Thailand, and Vietnam that are “already subject to an antidumping or countervailing duty order as of” June 6, 2022. Industry associations welcomed the President’s actions as providing the clarity that the market needs to allow solar projects to proceed. It remains to be seen whether and how the domestic solar industry will challenge this executive order and what if any steps the domestic solar industry will take in response. Commentators are already noting that the authority on which the President based his determination does not seem applicable to the current situation and predicting legal challenges. Prudence dictates that parties to paused deals continue to wait to ensure that the Secretary of Commerce makes the determination that the emergency declaration contemplates, but once that happens, deal flow will likely resume at normal levels.
Foley’s Renewable Energy practice has deep experience in all aspects of the solar industry, as well as extensive experience with the Department of Commerce. If you have any questions about this emergency declaration, Commerce’s response, or its impact on your business, please contact Mike Walsh, Jeff Atkin, or your Foley lawyer. Jeff is the co-chair of Foley’s Energy practice, and Mike is the former chief of staff and acting general counsel at the U.S. Department of Commerce.