Does The Biden Administration Have Any New Plans?

Even though there are only a few weeks left in Biden's term, the Biden administration seems to be constantly moving forward with new plans.

Senior Biden administration officials are considering exempting Mexican imports of solar equipment from tariffs, but have not yet made a final decision, according to sources, a decision that could benefit a Chinese-controlled photovoltaic company.

For a long time, the US PV deployment has been highly dependent on cheap foreign-made equipment. As a result, the US government has been trying to foster domestic clean energy manufacturing while not wanting to affect the deployment of PV power generation in the United States, which has made the US tariff on PV modules an important topic of controversy.

In early 2018, then-President Trump imposed tariffs on imported crystalline silicon solar cells and modules. Later, this tariff was extended by Biden to February 6, 2026, and the tariff level for PV cells and modules was set at 14% for most of next year.

The United States exempted Canada from tariffs on PV products in 2022, but it did not exempt Mexico because the US government believed that domestic solar manufacturers in the United States would be seriously harmed by Mexican exports.

The plan currently under consideration by Biden would effectively reverse the current status quo, which may increase the import volume of solar products in the United States and give an advantage to Maxeon, the leading PV module supplier in Mexico.

According to data, Maxeon's factory in Mexico can produce 2.5 gigawatts of solar modules per year, accounting for about 93% of the country's total production capacity. The company is majority owned by China's TCL Zhonghuan New Energy Technology Co., Ltd. (002129.SZ).

The tariff exemption could give Maxeon panels made in Mexico an edge in the U.S. But it doesn't solve other challenges the company faces, including a sluggish U.S. solar market.

In November, the company announced a broad restructuring plan to focus on the U.S. market and sell off other businesses.

Maxeon said it intends to build a module assembly plant in Albuquerque, New Mexico, although the planned capacity has been scaled back from the 3 GW first announced in August 2023.

A 2 GW plant under construction there is expected to start production in early 2026, a year later than originally envisioned, Maxeon said.

The project has been welcomed by New Mexico Democrats, including Senator Martin Heinrich, who will become the top Democrat on the House Energy and Natural Resources Committee in 2025.

However, even if Biden exempts tariffs on solar equipment made in Mexico, the sustainability of this policy may still be in doubt, considering the upcoming change of US president.

US President-elect Trump has threatened that once he takes office, he will impose a 25% tariff on Canada and Mexico to combat illegal immigration and fentanyl trafficking.

Currently, some US manufacturers that are highly dependent on imported photovoltaic modules have lobbied the government to increase the duty-free quota for photovoltaic modules next year.

They said that while the United States expands its domestic battery production capacity, if high tariffs are still imposed, it will have an adverse impact on US panel manufacturers that rely on foreign supplies.