The federal government's decision to suspend tariffs on solar cell modules from four Asian countries (Malaysia, Thailand, Vietnam and Cambodia) does not resolve the uncertainty facing Minnesota's lone solar manufacturer.
Heliene, a solar-panel maker, operates a plant in Mountain Iron, a northern Minnesota city, that relies on solar cells from Malaysia, one of the countries under scrutiny for the tariffs.
American solar companies provide only 20 percent of domestic demand, and the Commerce Department is investigating whether China evaded tariffs by rerouting production through Malaysia, Thailand, Vietnam and Cambodia.
Heliene President Martin Pochtaruk recently sat down with reporters to discuss the state of the U.S. pv industry, the challenges it faces, and the expansion of its Minnesota module plant.
Q: What do you think of President Biden's decision to suspend photovoltaic taxes in four Southeast Asian countries?
A: It's too early to say. With only news reports and no details on how it will be implemented and whether it will be appealed, the stakes remain high.
Q: How will the Commerce Department investigation affect you?
A: The solar cells that make our solar modules in the United States come from Malaysia. Import duty may be payable if it is decided to impose import duty on Malaysian parts after investigation.
Q: Why not just switch suppliers?
A: It takes six to nine months and hundreds of thousands of dollars to test and certify a product from another country to qualify for import. Solar modules are electronics -- we can't just pat them on the back and ship them.
Q: What do you think of the allegations made by Auxin Solar, the company whose complaint triggered the Commerce Department investigation?
A. This allegation affects everyone's business in the photovoltaic industry. But at the same time, we understand that we must abide by the rule of law. When someone is accused of a crime, we don't go to a judge and say, "Hey, don't investigate."
Q: Have supply chain issues affected Heliene?
A: Many things are affecting our work. Import loading and unloading delays, and congestion. Half of the ports in China are not shipping because they can't find staff. These matters are unrelated to the ongoing investigation in the United States.
Q: How does your Minnesota plant work?
A. We assemble parts from different parts of the world -- it's no different than building a car, it's all assembled. We have 10 components from two or three domestic and international suppliers.
Q: Another big problem for the solar industry is that the solar tax credit expires in 2024 unless Congress decides to extend it. Are you worried?
A: We hope the Senate will continue to support the extension. There are several initiatives that could include tax credits in a climate package, or the so-called Build Back Better Act. But I'll answer your question with a question: Why is the financial return of a developer the most important thing? Because our profit margins are razor-thin.
Q: Do we necessarily need tax credits to keep the pv market growing?
A: When you look at what's happening in other jurisdictions, South Africa, Europe, these are very different economies and very different electricity markets. But they and many others are moving forward without tax rebates or investment tax credits. There are no special incentives, but the solar market is doing well.
Q: Let's talk about the history of your company in Minnesota, which was formed after the failure of component manufacturer Silicon Energy. Now you have a $21 million, 95,000 square foot expansion. How's it going?
A: We have been operating this facility in Minnesota since May 2017. Now, with the addition of our new facility, we will increase production from 150 megawatts to 550 megawatts per year. It will become one of the largest solar manufacturers in the United States.
Q: How many employees will you add, and by how many?
A: We will hire an additional 60 to 65 people to the more than 60 we currently have at the plant.
Q: You have more than quadrupled output, but only doubled employment. What's going on here?
A: We use robots. The existing production line has 18 employees working with the robots. The new line will have only eight employees, but output will be three times faster. But we still need to move the components manually, and we need to train the management software.
Q: Will the factory open on time?
A: We should have the equipment installed in the second half of July and up and running in August.
Q: Friede, in northern Minnesota, seems like an unusual place for solar energy. Why did you choose to build a factory here?
A: Our company is based in northern Ontario, Canada, so we are neighbors of Minnesota. We are all remote areas, but for the last 120 to 130 years, we have all depended on the mining and steel industry. We have a skilled workforce for highly advanced manufacturing.
Q: Despite the challenges, do you think solar still has good prospects?
A: If you look at the electricity generated in the United States every quarter, solar is almost 50 percent of the electricity generated, and it will continue to grow.