Determination on the Exclusion of Bifacial Solar Panels From the Safeguard Measure on Solar Products, 21497-21499 [2020-08189]

Agencies

• Office of the United States Trade Representative

[Federal Register Volume 85, Number 75 (Friday, April 17, 2020)]
[Notices]
[Pages 21497-21499]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2020-08189]


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OFFICE OF THE UNITED STATES TRADE REPRESENTATIVE

[Docket No. USTR-2020-0001]


Determination on the Exclusion of Bifacial Solar Panels From the 
Safeguard Measure on Solar Products

AGENCY: Office of the United States Trade Representative.

ACTION: Notice.

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SUMMARY: On January 23, 2018, the President imposed a safeguard measure 
on imports of certain solar products pursuant to a Section 201 
investigation. On February 14, 2018, the U.S. Trade Representative 
established procedures for interested persons to request product-
specific exclusions from application of the safeguard measure and to 
comment on the submitted requests. Based on the requests and comments 
received, the U.S. Trade Representative granted certain requests on 
June 13, 2019, including a request to exclude from the safeguard 
measure bifacial solar panels that consist only of bifacial solar 
cells. On January 27, 2020, the U.S. Trade Representative established 
procedures to consider whether to maintain, withdraw, or take some 
other action with respect to the exclusion of bifacial solar panels 
from the safeguard measure. Based on an evaluation of the comments 
received, and responses to those comments, and in consultation with the 
Secretaries of Commerce and Energy, the U.S. Trade Representative has 
determined that the bifacial solar panel exclusion is undermining the 
objectives of the safeguard measure. Accordingly, the U.S. Trade 
Representative will request that the U.S. Court of International Trade 
lift the order preliminarily enjoining the withdrawal from entering 
into effect.

DATES: Withdrawal of the exclusion for bifacial solar panels from 
application of the safeguard measure will apply to imported panels if 
the Court lifts the preliminary injunction but in no case earlier than 
May 18, 2020.

FOR FURTHER INFORMATION CONTACT: Victor Mroczka, Office of WTO and 
Multilateral Affairs, at [email protected] or (202) 395-9450, or 
Dax Terrill, Office of General Counsel, at [email protected] or 
(202) 395-4739.

SUPPLEMENTARY INFORMATION:

A. Background

    On January 23, 2018, the President issued Proclamation 9693 (83 FR 
3541) to impose a safeguard measure under section 201 of the Trade Act 
of 1974 (19 U.S.C. 2251) with respect to certain crystalline silicon 
photovoltaic cells and other products containing these cells. The 
Proclamation directed the U.S. Trade Representative to establish 
procedures for interested persons to request product-specific 
exclusions from the safeguard measure. It also authorized the U.S. 
Trade Representative, after consultation with the Secretaries of 
Commerce and Energy, to exclude products upon publication of a notice 
in the Federal Register modifying the Harmonized Tariff Schedule of the 
United States (HTSUS).
    On February 14, 2018, the U.S. Trade Representative established 
procedures to request a product exclusion and opened a public docket. 
See 83 FR 6670 (February 2018 notice). Under the February 2018 notice, 
requests for exclusion were to identify the particular product in terms 
of its physical characteristics (such as dimensions, wattage, material 
composition, or other distinguishing characteristics) that 
differentiate it from other products subject to the safeguard measure. 
The February 2018 notice provided that the U.S. Trade Representative 
would not consider requests identifying the product at issue in terms 
of the identity of the producer, importer, or ultimate consumer; the 
country of origin; or trademarks or tradenames. The notice also 
confirmed that the U.S. Trade Representative only would grant 
exclusions that did not undermine the objectives of the safeguard 
measure. The Office of the U.S. Trade Representative (USTR) received 48 
product exclusion requests and 213 comments responding to the various 
requests. The exclusion requests generally fell into seven categories, 
one of which concerned bifacial solar panels.
    On September 19, 2018, and June 13, 2019, the U.S. Trade 
Representative granted certain product exclusion requests and modified 
the HTSUS accordingly. See 83 FR 47393 and 84 FR 27684. The notice 
published on June 13, 2019 (June 2019 notice) excluded from application 
of the safeguard measure ``bifacial solar panels that absorb light and 
generate electricity on each side of the panel and that consist of only 
bifacial solar cells that absorb light and generate electricity on each 
side of the cells.''
    On October 9, 2019, the U.S. Trade Representative concluded, based 
on an evaluation of newly available information and after consultation 
with the Secretaries of Commerce and Energy, that maintaining the 
exclusion would undermine the objectives of the safeguard measure. 
Accordingly, the U.S. Trade Representative published a notice 
withdrawing the exclusion of bifacial solar panels, effective as of 
October 28, 2019. See 84 FR 54244.
    On October 21, 2019, Invenergy Renewables LLC (Invenergy) filed a 
complaint with the U.S. Court of International Trade alleging that USTR 
failed to provide notice and comment required under the Administrative 
Procedure Act (APA), 5 U.S.C. 551 et seq., before withdrawing the 
exclusion of bifacial solar panels. Invenergy filed a motion for a 
preliminary injunction to prevent the withdrawal from entering into 
effect. The Court issued a preliminary injunction on December 5, 2019, 
enjoining the U.S. Trade Representative from withdrawing the exclusion 
on bifacial solar panels from the safeguard measure.
    On January 27, 2020 (85 FR 4756), the U.S. Trade Representative 
issued a notice (January 2020 notice) noting concerns that:
    1. The bifacial solar panel exclusion will result in significant 
increases in imports of bifacial solar panels and therefore will 
undermine the objectives of the safeguard measure.
    2. The precise definition of bifacial solar panels excluded from 
the safeguard measure may require clarification.
    3. The exclusion in the June 2019 notice is broader than the 
category of products described in the exclusion requests submitted as 
of March 16, 2018.
    The U.S. Trade Representative established procedures and opened a 
public docket to seek comment on whether to maintain the exclusion of 
bifacial solar panels from the safeguard measure, withdraw the 
exclusion, or take some other action with respect to this exclusion. 
The January 2020 notice confirmed that the U.S. Trade Representative 
would request the Court to lift the injunction if he determined that it 
would be appropriate to

[[Page 21498]]

withdraw the bifacial exclusion or take some other action with respect 
to this exclusion.
    In the January 2020 notice, the U.S. Trade Representative 
specifically requested information or views regarding the following, 
with sufficient evidence to support a particular position:
     Global and United States production and production 
capacity for bifacial solar panels prior to and following the exclusion 
of these products in the June 2019 notice, along with any information 
on expected changes in production and production capacity for the 
remaining term of the safeguard measure (i.e., until February 6, 2022).
     Projections for the production and importation into the 
United States of bifacial solar panels for the remaining term of the 
safeguard measure.
     Import data and entry documentation to establish the level 
of bifacial solar panels imported into the United States prior to and 
following the exclusion of these products in the June 2019 notice.
     Projections of demand for bifacial solar panels by 
companies building or planning to build solar facilities or otherwise 
to install bifacial solar panels.
     Contracts, purchase orders, or other agreements that 
establish sales or other transactions, including those between 
suppliers and customers, regarding bifacial solar panels that have been 
or will be imported into the United States or will be produced in the 
United States.
     Production cost and price differential between the 
manufacture and distribution of monofacial and bifacial solar panels.
     Substitutability or competitiveness between monofacial and 
bifacial solar panels in the United States.
     Domestic production and production capacity of bifacial 
solar cells or bifacial solar panels in the United States.
     Whether the U.S. Trade Representative should modify the 
exclusion to implement a tariff-rate quota (TRQ) on the importation of 
bifacial solar panels that enter with no additional duty and, if so, 
the level (e.g., in megawatts) of that TRQ.
     The potential impact, if any, on the domestic workforce 
and economy in general should the exclusion be withdrawn.
     Any other information or data that interested persons 
consider relevant to the U.S. Trade Representative's evaluation.
    USTR received 15 comments regarding the bifacial exclusion and 49 
subsequent comments responding to the initial comments. The 
determination below is based on these comments.
    The U.S. International Trade Commission (ITC) issued a report in 
March 2020 (March Report) in response to a request from the U.S. Trade 
Representative for advice regarding potential modifications to the 
safeguard measure, which provided certain information with regard to 
the bifacial exclusion. In the March report, the ITC found that 
bifacial panels are projected to gain a large share of total demand in 
the coming years due to their power-generation advantages and relative 
cost competitiveness with monofacial panels--particularly the price 
advantage that the bifacial exclusion conferred upon them. See ITC 
March Report, at ES-5. Accordingly, the ITC found that the bifacial 
exclusion (a) likely will result in substantial increases in imports of 
bifacial panels, and (b) that these products likely will compete with 
domestically produced solar products in the U.S. market. See ITC March 
Report, at I-4 and 5.

B. Determination Regarding the Bifacial Exclusion

    Section 201(a) provides that, when the ITC finds that increased 
imports are causing or threatening serious injury to a domestic 
industry, the President ``shall take all appropriate and feasible 
action within his power which the President determines will facilitate 
efforts by the domestic industry to make a positive adjustment to 
import competition and provide greater economic and social benefits 
than costs.'' Proclamation 9693 provided that ``[i]f the USTR 
determines, after consultation with the Secretaries of Commerce and 
Energy, that a particular product should be excluded, the USTR is 
authorized, upon publishing a notice of such determination in the 
Federal Register, to modify the HTS provisions created by the Annex to 
this proclamation to exclude such particular product from the safeguard 
measure.'' The February 2018 notice provided that the U.S. Trade 
Representative would ``grant only those exclusions that do not 
undermine the objectives of the safeguard measures,'' which signifies 
that an exclusion is not appropriate if it would interfere with the 
domestic industry's ``positive adjustment to import competition.'' The 
information and comments provided in response to the January 2020 
notice indicate that the bifacial exclusion is doing this.
    Specifically, the information and comments support the following 
findings:
    1. Global capacity to produce bifacial solar panels is likely to 
increase significantly over the next three years.
    2. As bifacial solar panel production currently is low in the 
United States, and the vast majority of bifacial solar panel capacity 
is foreign, allowing import of bifacial solar panels free of safeguard 
tariffs disincentivizes U.S. producers from converting existing 
monofacial production to bifacial production or opening new bifacial 
production.
    3. Imports of bifacial solar panels were rising even before the 
bifacial exclusion and continued to increase after the exclusion.
    4. Demand both globally and domestically for bifacial solar panels 
is likely to increase significantly for at least the next three years.
    5. The cost of producing bifacial solar panels is not more than 10 
percent higher than the cost of producing monofacial panels.
    6. Bifacial solar panels and monofacial solar panels are 
substitutes from the perspective of utilities planning solar generating 
facilities in locations where both are cost-competitive with 
conventional forms of energy.
    7. Bifacial solar panels are expected to offer a 5 to 10 percent 
improvement in energy output over a same-size monofacial panel, and 
removing the safeguard tariff will enable their sale for prices below 
those of monofacial panels, which will depress prices for monofacial 
panels.
    8. The proposed TRQ for bifacial solar panels would allow 
importation of massive quantities of bifacial solar panels and 
therefore would duplicate the negative effects of the bifacial 
exclusion.
    9. Competition from low-priced imports prevented domestic producers 
from selling significant quantities of solar panels in the utility 
segment during the ITC's original investigation period, and low-priced 
imports of bifacial solar panels due to the exclusion are likely to 
have a similar effect under current market conditions.
    Moreover, bifacial solar panels are an innovative technology that 
represents a major area of growth for all producers of solar products. 
Utilities are the largest and most rapidly growing purchasers of solar 
panels in the United States. By disincentivizing domestic producers' 
production of bifacial solar panels, interfering with their ability to 
increase sales of monofacial and bifacial products into the utility 
segment, and having a depressive effect on prices for monofacial solar 
panels, the bifacial exclusion is hindering the domestic

[[Page 21499]]

industry's adjustment to import competition.
    Therefore, the U.S. Trade Representative has determined that the 
bifacial exclusion is undermining the objective of the safeguard 
measure on solar products, does not meet the criteria for a legitimate 
exclusion, and should be withdrawn. The U.S. Trade Representative has 
found further and additionally that the findings in the ITC March 
Report support the conclusion that the bifacial exclusion is 
undermining the objectives of the safeguard measure.

C. Consultation With Other Government Agencies

    As with the initial determination to exclude bifacial solar panels 
from the safeguard measure, the U.S. Trade Representative consulted 
with the Secretaries of Commerce and Energy regarding the comments, 
responses, and supporting evidence received with respect to the January 
2020 notice to reach this determination.

Jeffrey Gerrish,
Deputy United States Trade Representative, Office of the United States 
Trade Representative.
[FR Doc. 2020-08189 Filed 4-16-20; 8:45 am]
BILLING CODE 3290-F0-P