Last month Commerce closed out the circumvention inquiry that has hung over solar procurement since early 2022. The determination names specific companies, clears others, and sets up a compliance regime that will matter a great deal in about nine months.
Here is what was decided and what it changes for anyone buying modules between now and the middle of next year.
Commerce made affirmative country-wide findings of circumvention as to all four countries under inquiry: Cambodia, Malaysia, Thailand, and Vietnam. Within those findings it named specific producers as circumventing and cleared others.
Named as circumventing: BYD Hong Kong and New East Solar in Cambodia, Canadian Solar and Trina Solar in Thailand, and Vina Solar in Vietnam.
Found not to be circumventing: Hanwha Q CELLS Malaysia, Jinko Solar Malaysia, and Boviet Solar in Vietnam.
Worth noting that New East Solar had received a negative preliminary finding last December and flipped to affirmative in the final. Preliminary results in these proceedings are not reliable predictors, which is a useful thing to keep in mind if you are making procurement decisions against an ongoing inquiry.
The operative standard has two parts. A product is circumventing if the cells were produced in one of the four covered countries using Chinese wafers, and the modules incorporate more than two of six Chinese components: silver paste, aluminum frames, glass, backsheets, EVA sheets, or junction boxes.
Two consequences follow that are easy to miss.
First, because the findings are country-wide, the escape route for a producer that was not individually examined is certification rather than exclusion. A supplier from one of the four countries is not automatically paying duties, but it is inside the scope of the determination and stays outside the duties only by certifying, and by being able to support that certification. Note that Malaysia is covered country-wide even though both examined Malaysian producers received negative findings. What matters is that supplier’s own wafer and component sourcing, and its documentation.
Second, cells made in a covered country from Chinese wafers, then further processed in a country outside the inquiry, fall outside the finding. This creates a legitimate but paperwork-heavy sourcing path that some suppliers are already using.
The moratorium is still in effect. Presidential Proclamation 10414 suspended collection of these duties through June 6, 2024, and that remains the operative situation today. A module arriving from a named circumventing producer this month still enters duty-free.
What the final determination does is establish exactly who will owe duties when the moratorium ends, and at what point a supplier’s certifications will be tested.
Congress attempted to end the moratorium early this year through a Congressional Review Act resolution. Both chambers passed it, the President vetoed it, and the House failed to override. The June 2024 expiration therefore stands as the operative date.
For anyone planning a project that will energize in 2024 or 2025, this is the part that requires attention now rather than later.
Two separate clocks are running.
The first is the moratorium itself, which ends June 6, 2024. Modules entering after that date from a named circumventing producer, without adequate certification, will carry the full Chinese duty rates. Those rates are high enough to make a project uneconomic rather than merely more expensive.
The second is the utilization requirement, which is less well understood. Modules that entered duty-free under the moratorium must be used or installed in the United States within 180 days after the emergency period ends, which puts that deadline in roughly early December 2024. Equipment sitting in a warehouse after that date, resold, re-exported, or destroyed, does not qualify as utilized, and the importer becomes liable for retroactive cash deposits at rates that can reach 254 percent.
A project procuring modules today under the moratorium therefore has a hard installation deadline about fifteen months out, regardless of what happens to its interconnection application or its permitting.
Ask suppliers for their certification position in writing. A supplier from one of the four countries should be able to state whether it is relying on self-certification, what its wafer sourcing is, and how many of the six enumerated Chinese components its modules contain. A supplier that will not answer that question in writing is telling you something.
Get the importer of record identified in the contract. Duty liability attaches to the importer. On many commercial projects that is the EPC or a distributor rather than the owner, but not always, and the answer determines who carries the risk.
Build schedule margin ahead of December 2024. This is the item most likely to cause a problem for public agency projects, where board approvals, procurement cycles, and interconnection timelines are all outside the project team’s direct control. If your modules enter under the moratorium, they need to be installed, not delivered, before the utilization deadline.
Do not assume the moratorium will be extended. It rests on an emergency declaration under Section 318(a) of the Tariff Act, an authority whose application here is contested, and it has already survived one congressional attempt to end it early. Planning on an extension is planning on a political outcome, not a legal one.
The determination resolves one question and leaves the larger one open.
What it resolves: which specific producers were circumventing, and what the test is. That is genuinely useful, because it converts a period of undifferentiated uncertainty into a supplier-by-supplier diligence problem, which is a problem procurement teams know how to work.
What it leaves open: whether the moratorium itself was lawful. Domestic manufacturers have consistently argued the emergency authority does not reach solar equipment, and that argument has not been tested in court. As long as it is untested, every module entering duty-free under the moratorium carries a small tail risk that someone will later argue the exemption was invalid.
We flag that not to alarm anyone but because it belongs in the contract. A change-in-law provision that contemplates prospective duty changes may not address a retroactive one, and the difference is worth a conversation with counsel before signing rather than after.
We will post again as the June 2024 expiration approaches.
