Reading the solar tariff tea leaves

It's been two days since the Biden administration announced that it would consider expanding tariffs on solar imports, and participants across the spectrum of the U.S. solar energy sector have thoughts.

Why it matters: There's no question about the demand for more solar in the U.S., but there's a big question about the supply.

• U.S. solar developers and the sector's trade group are declaring that the mere specter of tariffs is already having a catastrophic impact.
• Yet some analysts and U.S. manufacturers, and a key figure in the administration, are tamping down the alarm.

Catch up fast: On Monday, the Commerce Department said that it will investigate whether China was circumventing tariffs on solar imports by moving production to Cambodia, Malaysia, Thailand and Vietnam.

• The petition was submitted by U.S. manufacturer Auxin Solar, and comes after Commerce rejected a similar petition from an unnamed group of U.S. solar manufacturers.
• The initial tariffs on China, instituted under Trump, were ostensibly aimed at supporting U.S. manufacturing.

What they're saying: Investors have started examining scenarios where expanded duties, if implemented, would be felt into 2025.

• "We spoke with one such investor this week who was trying to estimate the potential impact of antidumping and countervailing duties on solar products sourced from Malaysia to assess the viability of project investments well into the future for 2024-25," Nick Baker, a senior director in the export controls and sanctions practice at FTI Consulting, tells Axios.

Yes, but: Jigar Shah, director of the U.S. Department of Energy's Loan Programs Office, took to Twitter to address the folks who were blowing up his phone:

• "Anti-dumping (AD) and countervailing duties (CVD) cases are a judicial process with a very low bar in favor of domestic manufacturers. DOC found that the previous case was filed incorrectly (anonymous party). This current version corrects that so the case moves forward," Shah wrote.

• While the original tariffs haven't demonstrably boosted U.S. solar manufacturing, he added, congressional legislation like the Solar Energy Manufacturing for America Act would have an impact.

What's next: Legislation to support U.S. solar manufacturing would undoubtedly go much farther in shoring up domestic solar makers. The question is where key materials would come from — and at what cost.

• "If you were to ask the U.S. industry if they will be able to meet the growing demand for domestic solar projects, their answer would probably be yes. I would expect less-certain responses if you ask them where the additional capacity will come from, how quickly it will be online and if domestic costs will remain stable," FTI's Baker says.