Despite being in the final weeks of his presidency, the Biden administration seems to be continuously pushing forward with new initiatives.
Senior officials in the Biden administration are considering waiving tariffs on imported solar equipment from Mexico, according to sources, though no final decision has been made. This decision could potentially benefit a Chinese-controlled photovoltaic enterprise.
The deployment of photovoltaics in the United States has long been highly dependent on cheaply made foreign equipment. Therefore, the US government has been striving to cultivate domestic clean energy manufacturing while not wanting to affect the deployment of photovoltaics on US soil, making tariffs on photovoltaic modules a controversial topic.
In early 2018, then-President Trump imposed tariffs on imported crystalline silicon solar cells and modules. These tariffs were later extended by Biden until February 6, 2026, with the tariff level for photovoltaic cells and modules set at 14% for most of next year.
While the US granted a tariff exemption to Canadian photovoltaic products two years ago, it did not do the same for Mexico, as the US government believed that domestic solar manufacturers would be severely harmed by Mexican exports.
The change currently being considered by Biden would effectively reverse the current situation, potentially increasing the amount of solar products imported into the US and giving Maxeon, a leading Mexican photovoltaic module supplier, an advantage.
Data shows that Maxeon’s factory in Mexico can produce 2.5 gigawatts (GW) of modules annually, accounting for about 93% of the country’s total production capacity. The majority of the company’s shares are held by China’s TCL Zhonghuan.
A tariff exemption could give Maxeon’s panels produced in Mexico an advantage in the US. However, this does not address other challenges facing the company, including the downturn in the US solar market.
Last November, the company announced an extensive restructuring plan to focus on the US market and sell off other businesses.
Maxeon stated that it intends to establish a module assembly factory in Albuquerque, New Mexico, although the planned capacity has been reduced from the 3 GW first announced in August 2023.
The company now says that a 2 GW factory being built there is expected to start production in early 2026, a year later than initially envisioned.
The project has been welcomed by New Mexico Democrats, including Senator Martin Heinrich, who will become the Democratic leader of the House Committee on Energy and Natural Resources next year.
However, even if Biden waives tariffs on solar equipment made in Mexico, the continuity of this policy remains questionable given the upcoming change in the US presidency.
US President-elect Trump has threatened to impose a 25% tariff on Canada and Mexico once he takes office to combat illegal immigration and fentanyl trafficking.
Currently, some US manufacturers heavily reliant on imported photovoltaic modules have lobbied the government to increase the tax-free quota for photovoltaic modules next year.
They argue that while expanding domestic battery production capacity in the US, imposing high tariffs would adversely affect US panel manufacturers that rely on foreign supplies.
