How the solar industry swayed Biden on import tariffs

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In Episode 4 of the Factor This! podcast, Abigail Ross Hopper, CEO of the Solar Energy Industries Association trade group, shares how the solar industry swayed President Joe Biden to pause new tariffs on module imports from Southeast Asia, while also boosting domestic manufacturing.

And later in the episode, Intersect Power CEO Sheldon Kimber discusses the early days of Recurrent Energy, tariffs, and solar's path forward.

The fourth and final episode of the Factor This! Auxin Solar tariff petition series is available June 20 wherever you get your podcasts.

Abigail Ross Hopper was in unfamiliar territory.

As CEO of the Solar Energy Industries Association, the industry's leading trade group, she didn't expect to be lining up against an administration with arguably the most ambitious clean energy and climate goals in U.S. history.

But the Department of Commerce's decision to open an investigation based on the Auxin Solar petition, and whether modules imported from Southeast Asia are skirting duties against China, presented what was seen as an immediate, existential threat to SEIA's member companies.

Go deeper: An exclusive interview with Auxin Solar CEO Mamun Rashid

In March, more than two months before President Biden moved to extend a lifeline to the solar industry with a two-year pause on new tariffs and an Executive Order aimed at boosting domestic manufacturing, Renewable Energy World noted the industry's decision to take public its trade spat with the White House.

Hopper said the choice to publicly pressure the Biden administration was an "intentional and thoughtful shift" that was made by SEIA and the American Clean Power Association, two trade organizations that normally compete for membership but aligned to mount a $5 million campaign against the tariff investigation.

"I do not have this job to protect an administration. I have this job to advocate on behalf of the solar and storage industries in the United States," Hopper told the Factor This! podcast. "Whoever gets in the way, or whoever is hurting my companies, is going to hear from me."

Background: Inside the solar industry's $5 million fight against new tariffs

Energy Secretary Jennifer Granholm, climate envoy John Kerry, and White House climate advisor Gina McCarthy all pushed Biden to intervene in the trade case, according to news reports.

But Hopper said she believes it was the stories from American solar companies that ultimately swayed the president.

"The conversation that we were having to have with elected officials and policymakers was… we have a crisis on our hands today, not a potential crisis in six months or a year," Hopper said.

What's next? How to build a domestic solar supply chain

Abigail Ross Hopper, CEO of the Solar Energy Industries Association

There's little time for a victory lap. Hopper knows that.

With the clock ticking on the two-year pause on new tariffs, the solar industry now must effectively push for federal incentives for domestic manufacturing and updates to U.S. trade policy.

SEIA is a backer of the Solar Energy Manufacturing for America Act, a bill that would provide incentives for domestic manufacturing at every stage of the solar supply chain. The bill passed in the House last year but has yet to receive a vote in the Senate.

Congress also must find funds to support Biden's initiation of the Defense Production Act.

SEIA also is actively engaged in negotiations around the America COMPETES Act, which would give the Department of Commerce more discretion over whether to take up a trade case.

"It doesn't feel overwhelming to me," Hopper said of the policy fights ahead and the short timeline, "but it definitely feels like there are a lot of moving parts."

"What a nice problem to have, you know? We sit at this incredibly opportunistic moment in history."

Solar's path forward

Changing solar's status quo — and the seemingly endless cycle of import tariffs — is crucial to the industry's evolution, according to Intersect Power CEO Sheldon Kimber.

In 2007, Kimber helped start Recurrent Energy, which placed one of the first large orders for Chinese solar modules in the U.S.

Recurrent used Chinese-sourced panels to develop the 5 MW Sunset Reservoir solar project for the San Francisco Public Utilities Commission— at the time, a massive utility-scale project. The project reached commercial operation in 2010, just as the U.S. was shifting from a net exporter of solar modules to a net importer.

The first tariffs would soon follow.

Solar tariff timeline

2012: Obama administration implements anti-dumping and countervailing duty (AD/CVD) rules based on Chinese solar manufacturers, linking the AD/CVD to the origin of the cells, not the module. Cells were offshored out of China, primarily to Thailand, while modules were still produced in China with components subsidized by the Chinese government.

2015: Obama administration adds follow-up AD/CVD against China and AD against Taiwan to address the cell/module workaround. AD/CVD is attached to the solar module's origin, regardless of where the cell is produced.

2018: Trump administration establishes Section 201 safeguard and quota. Tariff rate is implemented on all solar module imports, regardless of origin, with a duty-free importation of 2.5 GW of cells for domestic module manufacturing.

2022: Biden administration extends Trump-era Section 201 safeguards for another four years, but expands the cell import quota to 5 GW and exempts bifacial solar modules.

Kimber said he believes the first round of anti-dumping and countervailing duties levied against Chinese manufacturers in 2012 were justified: China had flooded the market with cheap modules. And while there was initial pain across the U.S. solar sector, the disruption wasn't as significant as the industry expected, he said.

But the pattern that took shape--with follow-on tariffs from the Obama administration in 2015 and the Section 201 safeguard by the Trump administration in 2018--did little to support domestic manufacturing.

"We think someone's trying to encourage us to do something other than what we're doing, but it'd be really good if they would show us what it was in a more positive way," Kimber said.

As one of Arizona-based First Solar's largest customers, Intersect Power was insulated to a large degree from the Auxin Solar tariff petition. The company has procured 4 GW of panels from the U.S. manufacturer over the last four years.

There are only so many domestically manufactured modules to go around, though: Less than 10 GW per year. And, for the sake of the broader solar industry and meeting urgent climate goals, Kimber said the industry's entire approach to these trade disputes needs to change.

Kimber conceded that the solar industry bears some of the blame for the current situation. But, he said, policymakers are more at fault for not creating a plan that pulls together the goals of manufacturers, developers, and customers.

"We need to sit down and say 'truce,'" Kimber said. "Let's make a three- or four-year plan."

He said that "instead of letting gravity take its course" the industry should have sat down years ago to address the issue of low-cost imports that came at the expense of domestic manufacturing.

Kimber's passion for domestic manufacturing comes from his upbringing.

Born in South Africa, he moved to the U.S. as a child and grew up in Ohio. There, he watched as friends and family were left behind as Rust Belt manufacturing left for lower-cost options in other countries.

"You have to acknowledge that economics and markets do express the opinions and values of those who participate in them. It is pure abdication on the part of people who move money and goods around the world to say, 'Let the markets decide!'" Kimber said.

"Have an opinion. I have an opinion. I work in markets. My opinion is we should make more stuff in the United States."

Kimber, through Intersect Power, said he believes he can lead by buying American-made products. And policymakers can extend that opportunity to the rest of the industry today, he said, by passing meaningful incentives.

Factor This! Ep. 4 transcript

Sound bite – Mamun Rashid, Auxin Solar CEO 00:03

My name is Mamun Rashid, I'm CEO of Auxin Solar.

Sound bite – Heather Zichael, ACPA CEO 00:35

It cannot be overstated. This is an existential threat to the future of solar in the United States of America.

Sound bite – Rhone Resch 00:43

I think my biggest regret is the fact that we didn't prioritize domestic manufacturing in a way that we should have.

Host: John Engel 00:51

Welcome to Factor This! -- a podcast for the solar industry. This is our fourth and final episode of our deep dive series on the Auxin Solar tariff petition. I'm John Engel. Over the course of this series, you've heard directly from Auxin Solar's CEO. We took you behind the scenes of solar's fight against the Biden White House. And we broke down piece by piece what it'll take to build out a domestic solar supply chain. That brought us to this moment, a lifeline from President Joe Biden. He paused new tariffs on solar modules imported from Southeast Asia for two years, and issued an emergency declaration to boost domestic manufacturing. As quickly as projects came to a halt, the solar industry is back. But we have to remember the Department of Commerce investigation continues. At the end of the 24 month reprieve. The agency could implement tariffs of 50 to 200% if companies are found to be circumventing trade duties against China. The clock is ticking. How will the industry use the next 24 months to secure a domestic solar supply chain and separate itself from China? Can the solar industry seize this moment? Or will it again find itself in a precarious trade dispute two years down the road? Abigail Ross Hopper CEO of the Solar Energy Industries Association answers those questions and tells us what finally led the Biden administration to step up in the trade case. And later, we're joined by Intersec Power CEO Sheldon Kimber for look at his background as a solar veteran, and where he sees the path forward for the industry. All that is next on Factor This!. There's reason to be excited by President Biden's executive order. It's clear the solar industry's $5 million campaign against the Auxin Solar tariff petition worked. But what matters now is if industry trade groups can use that same energy to pass meaningful incentives for domestic manufacturing and rewrite antiquated trade laws. Up first on Factor This! SEIA CEO Abigail Grace Hopper. Well, Abby, thank you so much for taking the time to join our show. I've really wanted to talk to you about this topic, especially because it's been a very busy few months for you. And before we go back through the whole process of the the Auxin Solar tariff petition, and really what has been the last year of this this conversation, can you bring me to this this most recent news of President Biden pausing new tariffs on imports from Southeast Asia and invoking the Defense Production Act? What conversation... was there a moment, was there a person that that you got through to that made the Biden White House want to get involved? We saw reports that Energy Secretary Granholm and climate envoy John Kerry and Gina McCarthy, the climate advisor, we're all kind of circling on this issue. But the industry was had to put up some real pressure led by SEIA, what was it? Can you take us behind the scenes?

Abby Ross Hopper, SEIA CEO 04:23

Yeah, well, first of all, thank you for having me on. It's good to chat with you today. I think the thing that was the most impactful was the real world stories from our companies, right? I mean, that the scale, the scope, and the speed of the impact was startling. That alliteration was not intentional, but it sounds good.

Host: John Engel 04:46

It was good.

Abby Ross Hopper, SEIA CEO 04:49

I think everyone was everyone, including all the people that you named, were taken aback by how quickly the industry just came to a grinding and painful halt, and that more than anything else, right, more than any kind of what... You know this, in policymaking there's a lot of projecting, right? 'Well, we think that next year, if we do this, this will happen or we can reach this goal by 2030.' But the conversation we were having to have with elected officials and policymakers was: no, no, this is happening. Like my company called me yesterday and said, they laid off 500 people, or this project just got cancelled, or there's literally no modules coming into the United States. And so we have a crisis on our hands today, not a potential crisis in six months or a year that we should take some more time and think about, that was the difference here,

Host: John Engel 05:42

Well and you have a lot of experience inside the beltway and you know, how all of this works. And sometimes it can be harder than than others. So what was this like for you and your career arc in knowing that the administration, by all accounts is friendly to clean energy and came in with some very ambitious and serious climate targets? Was it just a strange position? Did you ever kind of step back and say, you know, what's, what's going on here?

Abby Ross Hopper, SEIA CEO 06:05

Yeah, there were definitely some moments where I thought, like, what year is it? Alright, what conversation am I having? But I think to do this kind of work, you have to be a fairly optimistic person and so I remained fairly optimistic that there was going to be an elegant path forward, which I think the administration managed to, to deliver. But honestly, I mean, I don't mean to sound like a broken record, but it would not have been possible had companies not been really honest about what was going on, right? Like, at the beginning of every meeting of a trade association, we read an antitrust reminder, right? Because we have to, and the first line is we were treated sociation made up of competitors. Like full stop. The people that are my members compete with each other 24/7. So to have every one of those companies, we had over 700 companies, be really honest with us about what was happening in the workforce, what was happening in their project, what was happening in their supply chain. That level of transparency with us -- we didn't share other people's data, we anonymized everything -- that ability to even be willing to talk about it, I think made all the difference in this case, because without that level of specificity, and without those real world examples, and without the pain, unfortunately, that people were feeling... You know, in DC, we like to think about things and like, you know, think about options, and maybe we'll do it this way, or maybe we'll do it that way. Or maybe we should game this out. And like people are losing their jobs day by day by day. And so that was the message I think that was really persuasive.

Host: John Engel 07:47

When it wasn't just the member companies, it was us a trade association, too, because you kind of linked arms with American Clean Power Association. And, and you know, we're all rowing in the same direction and have the same overarching goals. But in reality, you're somewhat of competitors, also, in events and representation and membership. So so that was even strange. And it's just the entire moment was bizarre, in that we have all of these trade associations and and competitors that you mentioned, really having to unite against an an administration that otherwise was was a gift to clean energy.

Abby Ross Hopper, SEIA CEO 08:22

Yeah, yeah, it was an odd moment in time. But as you said, those moments are not a time to spend thinking about territory or reputation or who's getting credit. It really is a time to think about what what does this industry need and how can we be the best advocate. And so yeah, we were happy to welcome anyone onto onto the stage with us, as we, you know, we're super clear with the administration about the damage that was being caused.

Host: John Engel 08:53

So let's jump in back to last year, when we had the case from anonymous solar manufacturers that Commerce dismissed because it simply didn't meet the requirements. No one identified themselves, as you know, as a company, which is critical to an investigation like that. How did you approach that in the months that followed? Were you weary that, you know, all it would take was another company to come in, stamp their name on it and fire this up again? Did that jumpstart the conversation about domestic incentives for manufacturing? How did you game all of that out? Because you knew you had to know something could come.

Abby Ross Hopper, SEIA CEO 09:29

Yeah, of course we did. And honestly, the I mean, we've known that for a long time. Right. I think one of the pretty significant changes that has happened under my tenure at SEIA is that we have embraced this idea that we need to build a strong domestic manufacturing base here in the United States. We created a manufacturing division, gosh, over three years ago now. We had our first manufacturing summit in November of 2019. Right when still during the Trump administration, we had Trump administration officials at that event in Chicago. We produced a white paper that said, hey, this is the kind of policy incentives that are needed to build this. And we did that in 2020, actually, like before any of this, any of this particular conversation. And so the anonymous petition the fall was like a chapter in the story, right? It was neither at the beginning as either the first or the last, unfortunately. We had been doing a lot of work. And so it helped because it's hard to go to policymakers and simply say, no, right? Say don't do this. Much more effective advocates, go to policymakers and say, I have a better strategy for you, right? I have a way that you can achieve your goals, but also not hurt the industry you're trying to protect. And so that's what the domestic manufacturing agenda is about. You know, last spring, like, long before the anonymous petition was filed I was in somewhere hot and sticky, I was in Savannah, I think, with Secretary Granholm and Senator John Ossoff, talking about Ossoff's, you know, SEMA, the domestic manufacturing parts of the clean energy package. And so this has been a focus of SEIA's for a long time. And so that has really, I mean, that's really been our frame, right? Our frame has been, we agree on the outcome, right? We do not dispute the fact that there needs to be a strong and vibrant and healthy domestic manufacturing base here in the United States. And we have developed policy tools to get there that do not include tariffs. That's it. It's as simple as that.

Host: John Engel 11:45

Can I ask, did you approach the administration and say, here's a way to do this, give us a runway and invoke the Defense Production Act, and you can help us get there? Was this an idea from the industry? Or did the White House come up with this?

Abby Ross Hopper, SEIA CEO 11:59

My guess is that like most what people perceive, as most victories will have a million parents, right? What I can say is that we certainly did our own research and thinking about the Defense Production Act that we, you know, we have incredibly skilled trade attorneys here on staff and that we work with externally and had considered this Defense Production Act as a as a piece of the puzzle, right? I mean, I think the thing that is sort of inherent in all of these conversations is that there's not one, one solution, right, it has a number of different solutions, and the DPA is one of those. We'd certainly had those conversations about how the Defense Production Act could be a helpful piece of the puzzle, as we're trying to solve. solve the challenges in front of us.

Host: John Engel 12:49

I heard from developers too and Sheldon Kimber of Intersect Power in this episode later on, his his comment was, okay, this entire case magnified the need for domestic manufacturing, we don't all agree with how Auxin went about it. And we don't agree with even how the administration viewed the case. But we need time. That this can't happen overnight. So you were given time by the Biden administration, a two year runway, essentially a lifeline to say, okay, clock's ticking. And so there's no time, you know, to pop bottles and rejoice that this decision came down, because we've got two years, not just to pass meaningful policy, but to really ramp up a supply chain. And the tariffs could still come. So how do you spend the next, you know, 23 months and change now, to make sure that we don't wind up in this spot again?

Abby Ross Hopper, SEIA CEO 13:41

Yeah. I mean, it's really incumbent upon us us as a trade association and us as an industry to step up and deliver on the promises that we made, just like we expected the administration to step up, and, you know, deliver on the campaign promises that they made. We have spent a lot of time as I said, thinking about the domestic manufacturing, what we what we have in United States now, what we need to build to to have a healthy supply chain, sort of where the opportunities are, what some of the sticking points could be. We actually have, we have our board meeting this great time, and we have our board meeting tomorrow. All my board members are enroute to DC as we speak. And we have months ago hired a supply chain expert to really do an analysis of opportunity here in the United States. And look at where we should be investing in the supply chain to have the most impact, quickest, right? We clearly want the entirety of the supply chain, but different parts of the supply chain take different amounts of time. And so what are the areas that are the most ripe for quick expansion? And so he'll be briefing our board tomorrow. And that's the playbook right that announcements that have already been made about module, manufacturing facilities, those companies need to execute on their plans, and we need to start making tangible and specific and measurable progress on these other parts of the supply chain. I think we can do it. I mean, I think we can do it. I'm not saying we had to have it fully functional in two years, we have always looked at 2030 as the goal. But I do think we can make measurable and demonstrable progress. And I think that's what the administration needs us to do. But it's, it's an exciting time. I mean, most of the times exciting in my world, but but it is a pretty exciting time to be in the industry and have this moment where we can create, right, we have some room to create and build, and not simply play defense. I'm excited about what the future is going to hold

Host: John Engel 15:49

And maybe not for the reasons that we would have all wanted but to have solar have a voice that it's had over these last, I'd say these last six weeks or so when it really intensified in DC, where the Wall Street Journal and Washington Post and New York Times are putting solar tariff kind of wonky trade policy articles on A1. I mean, that is that's a big deal. And I think it's a real testament to where the industry is. So to that point, and to the point of the next two busy years, it's not just the incentives for domestic manufacturing that we're talking about there is a multi pronged policy fight that goes forward, we need to fund the Defense Production Act to be used for solar manufacturing a fund that doesn't have a whole lot of money sitting in it right now. We need SEMA Act. We all know that. And we probably need a rewrite of some trade policy to protect the industry in a couple of years, and maybe need to codify this, this reprieve from tariffs from Southeast Asia, which how does that rank? Is it all at once? Is your team like divide and conquer? Or is it just like, I don't want to say crazytown but it must feel so overwhelming at some point.

Abby Ross Hopper, SEIA CEO 17:03

It doesn't feel overwhelming to me, but it definitely feels like there are a lot of moving parts that we need to keep track of. And as you said, I mean there's the Competes Act right that's on the hill and and conference right now that we are advocating voraciously on. Obviously, not only SEMA, but long term extensions of the investment tax credit and the standalone storage credit to provide that market certainty. There are a number of things, but what a nice problem to have, you know, like we're gonna grow, we're gonna grow, I don't even think growing exponentially is the right phraseology, right, we're going to grow surpass our wildest dreams, every projection of solar has been wrong, and that it's never, it's always too conservative, right. And I think that's gonna continue. So we sit at this incredibly opportunistic moment in history, like I have children, and they, you know, the world that I'm giving them, and that we're giving them is going to be different. And we can, it will be different, we can either make sure it is a healthier, more equitable, more just world or a dirtier sort of more extracting and unjust world. And I'm pretty strongly committed to the farmer. And so you know, I think we're ready to go, I know my board is ready to go. I know our manufacturers are ready to go. And so this is incredible, like fighting a tray case for the last six weeks, three months a year, more than that is a really frustrating and sort of circuitous process around and around and around. We came up with in conversations, we are now shifting into this incredibly creative and expansive phase. And I mean, the energy that we would that we don't have to spend on defense, and instead can spend on expansion is pretty phenomenal.

Host: John Engel 18:58

And how do you extend that that olive branch to to the domestics, which I know are a part of the SEIA framework, too, and you have those conversations? But But But clearly, you know, the biggest impact of this trade case was to the utility scale developer and that was kind of the the focus on the impact. How do we bring in those those domestic manufacturers and say, you know, let's put this this case behind us. Tell us what you need, even beyond SEMA. Tell us what you need, how we can support you as much as we support the utility scale, folks?

Abby Ross Hopper, SEIA CEO 19:29

Yeah. Well, I mean, I think that's one of the areas in which the DPA the Defense Production Act is really critical and even sort of despite like funding, there are parts of that and the President certainly called out for long term supply agreements and master supply agreements, aggregating both federal federal demand, but also state and local demand. Right. And if you think about the opportunity there... manufacturers, they want to compete, they want to compete fairly and they want customers right? Those are the kinds of things that we can provide. We certainly have the customers. And we both at the at the developer level, but also, you know, United that US citizens want solar, right. Every every every poll tells you that. And so thinking about how we can support with some of the tools the President has now given us, the domestic manufacturers, I mean, that's, that's a conversation and we are happy to have it, as you said, many of those domestic manufacturers are in our membership now. Like we talk to them on a daily basis. So sort of this idea that there is, I mean, you know, some unmanageable rift in the solar industry is, I think it's false. I think it's false. We all know, where, where we're headed. And, you know, we're figuring out how we're gonna get there. But ultimately, we all agree on the outcome.

Host: John Engel 20:51

Can you walk me through the COMPETES Act a little bit, because I was backchannel talking with a developer recently, who was most excited about the work you're doing on that piece of legislation right now. So why is that important to you know, the trajectory of solar and what's in it?

Abby Ross Hopper, SEIA CEO 21:08

Yeah, so I will, I am not the expert on the COMPETES Act. But the part that we are really focused on is around... One of the one of the reasons why this case was so problematic, and why it ultimately, I think Secretary Raimondo initiated the case was that she did not feel like she had discretion not too, right. That was pretty clear from her statements. And so we want to make sure that that she doesn't know that commerce secretary finds themselves in that position, again. Because we saw, right we saw the mere initiation has such a detrimental market impact. And so putting into her initial or the Secretary's initial determination of public interest, or a public benefit, or a public good consideration, is critical. And so that's what we've really been lobbying for. That's the kind of language that we've asked the conferees to make sure it's included in a final COMPETES Act. It sounds totally reasonable, right? Like who could who could who could object to a public interest in my nice, quiet voice? But it is super controversial! And like...

Host: John Engel 22:19

Well that's quite a bit of a that's quite a bit of discretion, you know, and you never know whose... in whose hands that falls into that, you know, when when there's not a favorable administration, you know, how would that shake out? So I, I get it? I mean, I think, but it's clear that In instances like this, it felt so bizarre that such an impactful near term immediate case was linked to, you know, 1930s statute.

Abby Ross Hopper, SEIA CEO 22:48

Right. Right. Right. And so that's really it has been our focus on the Competes Act is making, you know, we're, obviously have thought through kind of all the different ways in which this can impact you know, not just today, but in the future. Sorry.

Host: John Engel 23:10

I might just leave this in.

Abby Ross Hopper, SEIA CEO 23:15

Abby doesn't know how to work her iPhone.

Host: John Engel 23:18

The woman at the head of the solar industry can't turn her phone on silence.

Abby Ross Hopper, SEIA CEO 23:25

It's all true. So we're trying to make sure that there is some discretion, understanding, as you said, that the use of discretion has upsides and downsides. But we think that on balance, it's a really critical element to to add, and as you just said, like these laws were written in the 1930s and they have been certainly litigated and defended for years, but we think it's appropriate to make this change.

Host: John Engel 23:55

What did you learn about yourself as an advocate, and just being a, you know, a policy wonk on this stuff over the last year that maybe you didn't know, before? Does anything stick out?

Abby Ross Hopper, SEIA CEO 24:08

Um, I mean, I think just as, as a human being, too, things stick out to me. One is that, you know, we that we put out this survey and, you know, a survey sounds really clinical and technical and sort of boring, so that we could get the data to use to advocate but in our survey, there were certainly places people could click, you know, is my supply chain at risk? Are my projects delayed? And then there was a narrative piece, and I read the narrative pieces, right? I always read the narrative pieces when we ask our members to share what's happening in their businesses. And it's it was just heartbreaking. Like it was just heartbreaking, right to hear about entrepreneurs that were having to lay people off. So I don't know that I learned anything about myself in that regard, but it's certainly It keeps me grounded and what I'm doing and why I'm doing it. But the second thing is thinking about how you advocate voraciously with an administration that you are almost completely in alignment with, as opposed to one that perhaps you have some more differences with is was a real interesting learning process, right, and how you build and maintain relationships, while also expressing extreme dissatisfaction for how the decision processes impacting the industry that you're representing. was a, an interesting learning tool, learning opportunity.

Host: John Engel 25:40

And before I let you go, I would love to drill down into that a little bit, because I wrote a story for RenewableEnergyWorld.com, several months ago, when I started to notice, you know, this is becoming more of a vocal rift between the administration and the industry in a way that you could tell both you and ACPA had toed that line for the weeks and maybe a couple of months that led up to it. It was it was a noticeable shift. When was that decision made to go harder at the administration? And how difficult of a call was that for you? Was that collaborative with with Heather Zichal and their team as well? Because it did seem kind of in sync.

Abby Ross Hopper, SEIA CEO 26:23

Yeah, I mean, Heather, and I talk very frequently, I'm sure she said that, too. So it was definitely a intentional and thoughtful shift. I absolutely agree. And, you know, our companies were hurting, right? Like, I was not, I do not have this job to protect an administration, I have this job to advocate on behalf of the solar and storage industry in the United States. And so that's my job, and whoever gets in the way, or whoever is hurting, hurting my companies is going to hear from me. I've never in my life felt the need to be disrespectful in that regard. But very clear, and very honest about what's happening and how I see it. And so I think those are the principles that guided us. And certainly, as the data kept coming in, and the pain was real and acute. And now, it really, I mean, it was not a hard decision to know that we had to turn up the temperature because this was, you know, this was not, as I said at the beginning, this is not a theoretical risk. This was an actual arm was being caused.

Sheldon Kimber, Intersect Power CEO 26:44

And it worked, and you have a lot of work ahead of you. But congratulations on getting to this point, and at least a bit of peace for the time being. Abby Ross Hopper. Thanks for joining us.

Abby Ross Hopper, SEIA CEO 28:42

Thank you so much, John.

Host: John Engel 28:45

Next up on the podcast, we're joined by Sheldon Kimber, CEO of Intersect Power and formerly of Recurrent Energy. He's a veteran of the solar industry and has big ideas about where it should go and how it should respond to the Auxin Solar tariff petition. And he's got a good story of his own. So without further ado, Sheldon Kimber.

Sheldon Kimber, Intersect Power CEO 29:03

So I'm Sheldon Kimber, I'm the CEO of Intersect Power. I'll talk more about what the company does because because I like to tell people I'm I'm just the deadbeat executive. I used to do useful things. My most of my training is on the financial side. So you know, my functional work before I became a CEO was on project finance and a little bit of kind of the derivative side in energy, you know, back when everybody was talking about Enron and trading power and gas and all that good stuff in the late 90s, early 2000s. So that's my kind of upbringing in the energy industry. And then went on to help start and build a company called Recurrent Energy back in the early in the in the glory days of solar, we built that and sold it to Sharp Electronics. Some of those facts will actually be will be good fodder here for some of our discussion and how the world has changed since but then I left Recurrent in 2014 took a little time off, you know, looked at a few other businesses and then ultimately came back and started Intersect in 2016. Intersect's focus is very different, I think, than a lot of other companies were, you know, in our space. We talked about it a lot with respect to hydrogen and other things. But you know, we're building right now about a 2.2 gigawatt solar PV portfolio and about one and a half gigawatt hours battery storage. And then, you know, our pipeline is actually focused almost as much on green hydrogen and fuels and direct air capture and really powering the decarbonization technologies of tomorrow, as much as it's focused on the grid. We're looking for really good people. I know, we're here to talk about how hard it is to get modules, but it's equally hard to get people. So.

Host: John Engel 30:47

Yeah, we'll let you have your plug for that. So you were with Recurrent Energy from 2007 to 2014. So you've had your share of time on the solar coaster and navigated these trade issues and tariffs in a leadership position for a major solar developer. Take me back through that time and what that was like for you.

Sheldon Kimber, Intersect Power CEO 31:04

Just before I do that, I will say that just just because I don't want to take credit. The solar coaster began years before that my wife was was one of the original the solar OG's back in the Power Light days. So I remember, I remember Power Light, you know, holiday parties, in 2000. So the people that were in solar before it actually made money to be in solar. But yeah, no, I think you're absolutely right, the big business of solar really kind of kicked off there. And with German feeding tariffs in Europe, you know, California RPS, and really the massive ramp of the industry. And maybe I'll start with kind of, I think, circa 2008 2009, when Recurrent Energy, you know, was working on our first really large utility scale project, which was the San Francisco Public Utilities Commission's reservoir project in this in the city of San Francisco. So a wholesale project utility scale, five megawatts very, very big. I think we won the contract and, you know, oh, seven neuroaid. But it took a long time to build that sunset reservoir project. So we were we were buying panels for that. And that was one of the first large orders, certainly recurrent made for panels. And I think one of the first really big deals, at least in the United States with Chinese modules. So, you know, we've certainly it was, you know, it was new enough that we spent an enormous amount of time with the project finance banks, you know, and the independent engineers pushing on, hey, you know, these are quality modules, here's the product, we spent time going over to China, with the IES, you know, looking at the factories, looking at the product itself. So that transition really started in that kind of 2008 2009 2010 period. I mean, when you say the US became a net... ceased being a net exporter in 2011. I think that's a little late in the game, because through most of my experience, the United States really was not a significant producer. It was much more probably the Japanese and Koreans, you know, the LGs, and the Sharp Electronics and those folks that had already kind of taken over from the United States, before the Chinese came in. And then really, it was, it was, it was an opportunistic point in time, right? Because what happened was, you went from having polysilicon that was being used to make things that were, you know, this big, right, you know, for well, not phones at the time, but computers and laptops and things. And all of a sudden, you had to make things that were, you know, huge, right, and so the polysilicon that you needed was much, much larger. So it was this, like order of magnitude change in what the supply stack of poly needed to be globally. And that constraint meant that there was an opportunity for a new entrant. And China really seized upon that, right. And, and just to be clear, this is all my perception in the marketplace, I'm sure others will tell you a different story, right, but from my experience in the marketplace. So that polysilicon, you know, that need to ramp polysilicon, the Chinese stepped into that, and from there began to also, you know, be able to build kind of the downstream business right into, you know, wafers and cells and then into modules. And so you had this huge rise in Chinese manufacturing on the solar side, fueled by that transition in polysilicon.

Host: John Engel 34:18

Given your role with Recurrent and having that first massive order for Chinese modules, then how did you navigate the the kind of tariff and and AD/CVD structures that followed in the Obama administration, you know, first in 2012, and then the revision in 2015? What was that process like for you as a company?

Sheldon Kimber, Intersect Power CEO 34:37

Yeah, well, I mean, extremely painful, right? I mean, these these, these tariff, these tariff policies are always extremely painful. You know, you'll hear me say this a lot, probably here today, but, you know, tariffs, it's sort of aspirational to call it policy, because in general policy is sort of in my view, you know, when you want to encourage something or or, you know, policy usually goes toward an end goal, right. And what we see and how tariffs have been used across the board, in our industry seems to be just kind of a stick. Right. And we keep getting, we keep getting beaten with the stick, but I think we're not really sure what it is we're supposed to do differently. Right. You know, it's like, we think someone's trying to encourage us to do something other than what we're doing but it'd be it'd be really good if they showed us what that was in a somewhat more positive way, right then than just telling us what not to do. So anyway, it was a very painful experience, as it as it continues to be today. The ADCVD tariffs that came on, they were really aimed at the fact that as the Chinese market evolved, you know, sort of the glory days of, you know, Chinese export led growth, right. And so, the country has a whole a centrally planned economy, we choose what products it wanted to lead the world in basically, in solar was one of them, right. And so solar panels, were going to be one of these products, that would fuel the export led growth of China. And so it really became a focus and, unfortunately, what that means in you know, Chinese economic policy is that for all intents and purposes, capex is free, right? And so you get a factory, if you can employ people and bring them in from, you know, the rural areas and raise them out of poverty and you know, you know, blend to the economic growth of the country. And so that whole process that went on across many, many sectors and electronics, also went on in solar. And so, you know, you can't really compete against that WTO and the GATT and all of those international trade conventions, you know, that's not what free trade is supposed to be. And so, the original AD/CVD tariffs, let's be honest, I think, probably were warranted, right? So I think, you know, when you look at kind of how they went on and what was being done in China, I don't think most people would say that it was a particularly fair playing field for trading competition. So when they hit from Recurrent's side, we had all we had just put in a very large, you know, set of orders. So we had, we were in a reasonably good position, from a module supply standpoint, and we had also just sold the company to Sharp Electronics. Now, Sharp wasn't making a lot of panels at that point, and they definitely weren't making them at the price points that would make any sense for our projects, but we were able to, through orders that had already, you know, come into the country, and, you know, I think we made one order through Sharp, we were able to sort of patch the the gap, if you will, the, you know, six to nine months. And then what you saw happen was the supply chain responded incredibly quickly, you know, like, like a river, you know, kind of a dammed river finding a new course. I mean, it was, it was, it was stunning, you know, all of the equipment that was in China and elsewhere, was moved to Southeast Asia, you know, some of the same Chinese companies set up business in Southeast Asia, and, you know, solved for, essentially the the amount of work that needed to be done in Southeast Asia to qualify as a Southeast Asian product, right. And so that dividing line has pretty much ever since then been Chinese wafers being sent to Southeast Asia, you know, turn into a cell into cells and, you know, made into modules from there. So, you know, the speed with which that change happened was stunning to me. And in fact, it didn't ultimately produce that much pain for the for the, you know, for the system. What we saw was probably a it went up and down, I'd say a little bit, but typically kind of a couple a couple cents a watt margin between what kind of the US module from out of Southeast Asia would cost and what a kind of a world market module would cost, right. That's kind of the story of those, you know, first tariffs and impact on Recurrent at least.

Host: John Engel 38:53

Well, there's this balancing act to that as the US was deploying a lot of solar over the last decade, it was doing so in large part because of the market structure or lack there of in China and subsidies that were coming from that government. And it's difficult at times to reconcile that as well as the human rights issues and the carbon footprint of the manufacturing cycle that solar has, all of these things are important discussion points.

Sheldon Kimber, Intersect Power CEO 39:18

Yeah, absolutely. I mean, I want to be really clear that Intersect Power and the industry as a whole, but I can speak very clearly for Intersect Power. You know, we take our supplier relationships very, very seriously. And, you know, specifically around the human rights issues, you know, those definitely fed into our, you know, our supply decisions for panels, you know, all the panels we're buying now, you know, we have purchased, you know, four gigawatts of panels from First Solar in the, you know, span of the last four years. So we are one of the first holders biggest customers and, you know, so obviously, I'm happy to disclose that. Your listeners can choose to pick whatever bias you want but, you know, my, my appearance here on this show is... I'm hoping to be as unbiased as possible and to try to just, you know, sort of stick to the facts. My interests as a company are taken care of by the fact that I am a First Solar customer. But I think a lot of it comes down to what does the government want us to do as an industry? Right? Again, tariffs just don't really communicate anything aspirational. They're just the stick that tells you, you know, bad dog don't do that. Right. And so, so there was, you know, what do you want me to do? Like, where's the incentive? Right. And so I think what we have to understand here is that, as a country, I believe that we have three goals, right? We want, we should be leaders in, you know, building jobs in the industries of tomorrow, right? Domestic jobs, in the industries of tomorrow. We care about energy security, and we care about the climate. Tariffs do nothing for any of these things. They make it so that we can spend money as customers and purchasers creating jobs in other countries, but they really don't do anything for our three priorities. Right. So what the government should be doing here is, you cannot compete against countries like China and I think the fallacy of sort of, you know, late 90s, you know, Clinton-era free trade is that all countries compete in the same way. Right? All countries are playing from the same playbook. And I think what we've learned is that you need to have some pretty strong industrial policies, if you actually have true goals, and it's in a sector, right. And I think both the the desire to lead in kind of the industries of the future and these green technologies, and the energy security and climate goals, we have put us in a very clear direction, we need to have a strong, positive, aspirational, industrial policy around these goods. Right. And we don't we just have someone saying don't do that. Right. And unfortunately, that isn't good enough. The industry is I believe, I truly believe I know, I know, a lot of these people, these people are some of my best friends are just as committed as Intersect Power is to labor standards, and domestic manufacturing and all of those things, but we don't have a business if we're forced to buy American panels, because there just aren't enough of them. Right. I mean, you know, what are we 20 gigawatts or so a year something like 22 gigawatts, right? So 80% of those panels are coming from, you know, embargoed countries, now maybe you've got five gigs of panels that are making it through, you know, my company alone has, you know, 1.1 gigs of those this year, and next year, right, like, so, Intersect Power controls 25% of modules in the United States, like, that's, that's silly. That's just, that's just dumb, right. And so I've harped on it again, and again and again. And some of its industry's fault, we were willing to take our lumps on it, but a lot of it is policymakers fault. We need a transition plan, we need to sit down at the table, we need to sit down with all the stakeholders, you know, domestic manufacturers, primarily, you know, the First Solar's of the world, policymakers, you know, developers and customers of panels, we need to sit down and we need to say, truce. You know what, we all have these goals, and we all share the same goals. You know, what, what hurts everybody, what hurts the developer side of this is when you slam the brakes on unpredictably. Why? Because our products are so long dated, right, we have to plan for things three years ahead. So let's make a three or four year plan where, you know, domestic manufacturers are satisfied, the government satisfied, and it says we're going to transition this amount of manufacturing to be domestic, we're going to provide these, you know, these incentives for domestic manufacturing, you know, and there's no reason that shouldn't be the case. And honestly, we should have done that three years ago. To be quite frank, John, sat down in 2011 and instead of letting gravity take its course, and just sort of push things through Southeast Asia, we should have fixed the problem then if the if we had such a strong opinion about it as a nation,

Host: John Engel 43:58

Why are you so passionate about domestic manufacturing?

Sheldon Kimber, Intersect Power CEO 44:00

I spent a good deal of my upbringing, you know... I was born and raised, you're born in South Africa, I'm sixth generation South African, but moved to you know, the States when I was very young, and spent a lot of my youth in, you know, Ohio and rust belt, Ohio, right. And, you know, I mean, we, you know, like, like every, you know, whenever poor bootstrap entrepreneur, CEO story, it's pretty trite, and, you know, I try not to wallow in them too much... but, you know, I was not raised with a lot. And, you know, a lot of my friends and, you know, the folks in my community worked in industrial jobs. Right. And so whether it was Timken or whether it was, you know, kind of the legacy of kind of the strip mining of coal in Ohio that had gone away. You know, there's a lot of folks that were unemployed who had come up in, you know, the industrial heyday of the United States. It's, and I guess, I'm not pollyannish I have a degree in economics and one in finance. And so, you know, I'm not I'm not. I'm not going to say that economics and markets don't work. But you really have to acknowledge that economics and markets do express the opinions and the values of those who participate in them. Right. And so, you know, it is pure abdication, on the part of people who move money and goods around the world, for us to say, let the market decide. You know what? Have an opinion. I have an opinion. I work in markets, my opinion is that I think we should build more stuff here in the United States. I think that that is better for our all of our goals, leadership, you know, in our country in high-tech industries of tomorrow, energy security, and our climate goals. That's my opinion. And, you know, all I can do is try to steer my company in a financially prudent way to try and help you know, achieve those goals and to buy things, you know, that are made in the places and in the ways that support those goals. I'm not asking everybody in the industry to do that. But I think, actually, that policymakers, if they act today could put everybody in the industry in a position where, regardless of what their opinion was, regardless of what their values were, were, the profit-maximizing outcome would be for them to do that. And I think that that is what we're asking government to do.

Host: John Engel 46:45

Thanks to Abby Ross Hopper and Sheldon Kimber for joining this episode of Factor This! And thank you to all the guests and those who listened to our series on the Auxin Solar tariff petition. If you missed any of the episodes, make sure to go to RenewableEnergyWorld.com to catch up. The podcast continues in two weeks with a bit of a different format, but still diving into the most important industry stories with those who actually move the needle. I'm John Engel from Renewable Energy World. Make sure to connect with us on LinkedIn and Twitter and please leave a rating and review wherever you get your podcasts as we try to grow this show. We'll see you next time on Factor This!