In a joint letter addressed to CBP Commissioner Rodney S. Scott and IRS Chief Executive Officer Frank J. Bisignano, Representative Ro Khanna (D-CA), Ranking Member of the House Select Committee on the CCP, alongside Representatives Mike Bost (R-IL), Pat Harrigan (R-NC), and Marcy Kaptur (D-OH), requested immediate executive action to protect the domestic solar supply chain.
The lawmakers contend that nearly finished solar cells manufactured in the People’s Republic of China (PRC) and other restricted nations are being purposefully misclassified upon import to bypass existing trade barriers and siphon federal incentives intended for American factories.
The ‘Blue Wafer’ loophole
At the heart of the issue is the importation of “blue wafers”—silicon wafers that have already undergone diffusion to form a P/N junction. According to industry data from the Solar Energy Manufacturers for America (SEMA) Coalition cited in the letter, this critical semiconductor step represents approximately 80% of the total capital equipment investment required to manufacture a functioning solar cell.
Once the P/N junction is formed, the component is capable of converting light into electricity, fitting the legal definition of a solar cell. However, manufacturers are allegedly importing these pre-diffused components under the guise of raw “wafers”.
Upon arrival in the United States, importing companies perform only minor downstream finishing steps—such as anti-reflective coating, metallization printing, and firing—before marketing the final product as “domestically produced”. This allows their customers to capture lucrative domestic content tax benefits while the manufacturers themselves claim the Section 45X Advanced Manufacturing Production Credit for cells.
Circumventing AD/CVD orders
The letter emphasizes that long-standing U.S. Department of Commerce policy dictates that the country where the P/N junction is formed establishes the country of origin for a solar cell. Furthermore, all active U.S. anti-dumping and countervailing duty (AD/CVD) orders explicitly define a cell as any product possessing a P/N junction, regardless of its stage of completion.
Currently, solar cells originating from the PRC, Taiwan, Cambodia, Thailand, Vietnam, Malaysia, India, Laos, and Indonesia are subject to AD/CVD restrictions. By masking these cells as raw wafers, foreign entities are successfully dodging strict import duties.
“This duty evasion and tax fraud is harming U.S. energy manufacturers and placing them at a clear competitive disadvantage,” the lawmakers wrote, noting that Chinese-controlled entities currently dominate more than 90% of global wafer and cell production.
Calls for immediate enforcement
The push underscores the tension between securing the multi-billion-dollar domestic manufacturing boom triggered by recent federal legislation and stopping aggressive trade maneuvers from global competitors.
To halt the practice before it becomes further entrenched in clean energy supply chains, the congressional coalition urged the two federal agencies to implement a strict two-pronged enforcement strategy:
The lawmakers also requested that both agencies issue public-facing, sub-regulatory guidance to serve as a clear deterrent to importers and project developers utilizing these supply chain workarounds.
Copies of the letter were additionally transmitted to the U.S. Department of Commerce and the U.S. Trade Representative to ensure inter-agency alignment on the matter.
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