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By Nichola Groom and Jarrett Renshaw
(Reuters) -The Biden administration is expected to grant a request by South Korea’s Hanwha Qcells to reverse a two-year-old trade exemption that has allowed imports of a dominant solar panel technology from China and other countries to avoid tariffs, two sources familiar with the White House plans said on Wednesday.
The news sent shares of solar manufacturers including U.S.-based First Solar higher in afternoon trade.
The Qcells request, which has not previously been reported, comes as the company is seeking to protect a pledged $2.5 billion expansion of its U.S. solar manufacturing presence against competition from cheaper Asian-made products.
The solar division of Korean conglomerate Hanwha Corp outlined the request in a formal petition to the U.S. Trade Representative on Feb. 23. It included letters of support from seven other companies with billions of dollars combined invested in U.S. solar factories.
No decision has been made on the timeline of the expected reversal, the sources said.
Duties on imports of bifacial panels, the main technology in utility-scale solar projects, would be a boon to the more than 40 solar equipment factories planned since U.S. President Joe Biden signed his landmark climate change law, the Inflation Reduction Act, in 2022.
Those plants are critical to Biden's plan to fight climate change, revitalize American manufacturing and create millions of union jobs.
Past trade remedies have sharply divided the U.S. solar industry, which is dominated by installers and developers who rely on cheap imports to keep their project costs low.
The top U.S. solar trade group, the Solar Energy Industries Association (SEIA), lobbied for the bifacial exemption.
In a statement, SEIA did not address the exemption directly but advocated for an increase in the amount of solar cells that can be imported tariff-free to help companies assembling American-made panels.
"We hope the Administration is prepared to directly support increased domestic manufacturing of solar modules by raising the tariff rate quota on cells," said Stacy Ettinger, SEIA's senior vice president of supply chain and trade.
Biden administration officials, including Treasury Secretary Janet Yellen and U.S. Trade Representative Katherine Tai, in recent weeks have said the U.S. is evaluating trade remedies to deal with threats posed by China's massive investment in factory capacity for clean energy goods.
The solar panel issue goes to the core of one of Biden’s arguments for re-election: that his economic policies have begun transforming the U.S. energy economy while combating climate change. However, the pace of growth in the domestic solar panel manufacturing market has been cast into doubt by surging imports of cheap, Chinese panels.