President Biden extends solar tariffs, with major caveats.

WASHINGTON — President Biden announced Friday that he would extend tariffs on imported solar products first imposed during the Trump administration but would reduce the scope of products affected by the levies, a decision aimed at balancing his goals for bolstering domestic manufacturing with speeding up the transition toward clean energy.

The decision will impose a tariff of between 14 percent and 15 percent for the next four years on imported crystalline silicon solar products that are used to convert sunlight to energy. But the Biden administration also moved to double the amount of solar cells that can come into the country without facing tariffs, and it said it would begin talks with Canada and Mexico to allow them to export their products to the United States duty-free.

The administration also said it would exempt a certain type of two-sided panel, called bifacial panels, from the levies to help ensure that solar deployment in the United States continues at the pace and scale needed to meet the president’s clean energy targets.

The carve-outs will maintain some protection for domestic industry while also allowing solar energy projects to continue accessing some cheaper foreign solar products. But they also angered some domestic manufacturers and labor leaders, who argued that the administration should be doing more to shield American manufacturers from cheap Chinese products.

Mark Widmar, the chief executive of First Solar, a solar panel manufacturer in the United States that had fought for tougher restrictions on imported products, said he was “deeply disappointed” in the decision and that it would allow China “to outflank American efforts to grow self-reliant solar supply chains.”

“Today’s decision places at risk billions of dollars in existing investment, thousands of jobs, our country’s energy security and a climate-critical transition to net-zero emissions,” he added.

Companies that install solar power projects using foreign panels praised the decision to scale back the tariffs.

Every dollar spent on tariffs means less dollars put toward creating jobs and opportunity in communities,” said George Hershman, the chief executive of SOLV Energy, the nation’s largest utility-scale solar installer. “The bifacial exclusion will help us greenlight projects and deploy more solar capacity across the country.”

The solar industry worked for the last three years to preserve the exclusion of bifacial panels from the tariff, though it had hoped for broader action that would remove the tariffs entirely.

Abigail Ross Hopper, chief executive of the Solar Energy Industries Association, said her group was disappointed with the decision to extend the tariffs but called the administration’s move a “balanced solution.”

Mr. Biden has pledged to cut U.S. emissions at least 52 percent below 2005 levels by the end of this decade, and the administration is counting on solar to play a significant role in reducing emissions from electricity production. A recent Energy Department report found that solar energy could provide up to 40 percent of the nation’s electricity by 2035, compared with its current 4 percent.

But much of the world’s supply of solar panels comes from China — creating a quandary for an administration that has described China as America’s foremost geopolitical and economic competitor.

China has pumped vast amounts of government funding into renewable energy industries. It now dominates all stages of the solar supply chain, producing between 60 and 80 percent of the world’s polysilicon, wafers, crystalline silicon cells and solar modules, according to Wood Mackenzie, a research and consulting firm.

American solar manufacturers have struggled to compete with low-cost products from China, even as U.S. demand for solar power has surged. The production capacity of American solar manufacturers stood at just four gigawatts last year, enough to satisfy just one-fifth of the country’s installations.

Xiaojing Sun, the head of global solar research at Wood Mackenzie, said some new manufacturing plants had opened since the tariffs were imposed, like Jinko Solar’s facility in Florida, LG Electronics’ in Alabama and Hanwha Q CELLS USA’s in Georgia. And some existing companies, like First Solar, had expanded operations.

At the same time, the U.S. solar market grew to about 20 gigawatts last year from 11 gigawatts four years before, meaning even as domestic manufacturers contributed more supply they did not gain more market share with the tariffs in place, she said.

“It wasn’t enough to turn the tide,” Ms. Sun said. “The amount of market that is met by domestic manufacturing is pretty small.”

The issue of how to treat imported solar products has divided some of the administration’s traditional allies. Labor unions, along with those who prioritize efforts to build a domestic solar industry and reduce trade with China, have been pitted against solar energy developers and others who see combating climate change as among the administration’s most important tasks.

Those divisions have been mirrored inside the Biden administration, where climate and trade officials have at times clashed over how tightly to curb Chinese imports.

China’s solar industry has also been tarred by its reliance on components sourced from Xinjiang, where the Chinese government carries out mass detentions of minority groups.

An administration ban imposed last year on solar products made with material from one Chinese company accused of using forced labor in Xinjiang brought tens of billions of dollars of U.S. solar installations to a halt, industry groups said. In June, a new law that strengthens the prohibitions on importing goods from Xinjiang will cast that net even wider.

In a joint statement with other Ohio lawmakers, the state’s senators, Sherrod Brown, a Democrat, and Rob Portman, a Republican, called Mr. Biden’s tariff announcement “a disappointing, misguided decision.”

“The administration is missing the best opportunity in a generation to ensure the United States leads the way in manufacturing solar supply chain components,” the senators said.

The solar tariff announcement came as the House of Representatives voted Friday morning to approve a bill that would devote nearly $300 billion toward scientific research, including $600 million in grants and loans to solar manufacturing. The Biden administration has also proposed substantial tax credits and other measures to spur the solar industry as part of its Build Back Better Act, but that legislation remains mired in Congress.

The solar tariffs were first imposed in February 2018, with President Donald J. Trump following a recommendation of the International Trade Commission, an independent panel that reviews trade cases. The tariffs started at 30 percent and were set to decline by 5 percentage points each year over the course of four years.

Those tariffs would have expired this month. But several manufacturers, including Auxin Solar, Suniva, Hanwha, LG and Mission Solar Energy, petitioned to extend the levies, arguing they were still needed.

In its announcement on Friday, the Biden administration doubled the amount of cells that could be imported into the United States duty-free to five gigawatts, saying the change would give domestic manufacturers that use the cells to make solar panels the supplies they need to be competitive.

But some critics said that change, along with the exclusion for bifacial panels, would gut protections for the domestic industry. In a note to clients on Tuesday, Julien Dumoulin-Smith, a research analyst at Bank of America Merrill Lynch, said that tariffs with those carve-outs “would be largely toothless.”

A senior administration official pushed back on those claims on Friday, arguing that the decision would help create jobs, reduce American dependence on foreign suppliers and meet ambitious clean energy goals.

The White House had been consulting with all sectors of the solar industry, and they all agreed that the tariffs on their own would not bring back solar cell production or increase module production to a point where it could supply U.S. needs, the Biden official said.

Ana Swanson reported from Washington, and Ivan Penn from Los Angeles. Lisa Friedman contributed reporting from Washington.

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