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Bifacial Solar Modules Now Exempt from Section 201 Tariff

On June 13, 2019, the Office of the United States Trade Representative ruled that bifacial solar modules are exempt from the Section 201 tariffs on solar cell and module imports. This exemption applies to articles imported on or after June 13, 2019, and creates an opportunity for cost savings over traditional monofacial solar modules. Developers and solar companies who have been importing, or are considering importing, solar modules should consider the potential for such savings in light of this exemption.

Bifacial solar modules differ from traditional monofacial modules because they absorb sunlight on both sides of the module. By replacing the standard reflective aluminum back cover of the traditional module with a clear material, such as glass, bifacial modules are able to receive light through the rear. If placed on a reflective surface at an angle that allows for sunlight to be reflected into the back of the panel, these bifacial panels can produce additional energy. However, despite this greater energy realization, traditional monofacial modules are still used more frequently than bifacial modules.

The Trump Administration initially made the Section 201 tariffs effective on February 7, 2018 at 30% with a 5% declining rate per year over four years. This tariff applied to all solar modules imported from any country, except certain developing countries that are part of the World Trade Organization (as specifically listed in Presidential Proclamation 9693). This is the second time the Trump Administration has granted exemptions since imposing the Section 201 tariffs. The first exemption granted on September 19, 2018 applied to solar cells and panels that met specific requirements for length, flexibility, frame, and power.

But even without the exemption, major developers have been experimenting with bifacial modules and some have begun integrating them into their utility-scale projects. With the exemption, the cost to acquire bifacial modules decreases significantly relative to the monofacial modules that remain subject to the Section 201 tariffs. This cost reduction, together with the greater energy realization inherent in the bifacial module design, may encourage a faster market adoption of the technology.

Generally, the impact of the Section 201 tariffs on the solar industry does not seem as severe as originally predicted. A year after the imposition of the tariffs, the cost of solar in the United States has decreased, and was estimated by one analyst to be only 5.6% higher than it might have been, had there been no tariff.[1] Nevertheless, this recent exemption creates an opportunity for even greater cost-savings over traditional monofacial solar modules.


*Additional Author Alex Niebling is a summer associate in the firm’s San Diego (Del Mar) office.

[1] Vikram Aggarwal, The Impact of the Solar Tariff on Prices, EnergySage (Dec. 27, 2018).

Copyright © 2019, Sheppard Mullin Richter & Hampton LLP.

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About this Author

AJ Gatesman Associate Sheppard Mullin Commercial Lending and Financial Transactions Real Estate and Land Use
Associate

AJ Gatesman is an associate in the Real Estate, Land Use and Environmental Practice Group in the firm's San Diego (Del Mar) office. AJ’s practice focuses on renewable energy project finance, with an emphasis on debt and tax equity financing of wind and solar facilities.

858-720-7490
Fatema Merchant, international, trade, Lawyer, Sheppard Mullin
Associate

Fatema Merchant is an associate in the Government Contracts, Investigations & International Trade Practice Group in the firm's Washington, D.C. office.

Fatema’s practice focuses on investigations and compliance counseling related to international trade laws.  She has extensive experience with U.S. Foreign Corrupt Practices Act and U.S.-Sanctioned Countries investigations, compliance, due diligence, and training.  Fatema also advises clients on compliance with International Traffic in Arms Regulations, Export Administration Regulations, Customs and Anti-Money Laundering regulations.  At Sheppard Mullin, she serves on the D.C. Diversity Working Group, Recruiting Committee, and is co-chair of the DC women lawyers’ group.  Fatema also serves on the pro bono committee and is actively involved in various pro bono matters, including preparing asylum applications and working with students at American University to seek resettlement for Iraqi refugees as part of the Iraqi Refugee Assistance Program.   

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