‘We’re in an existential situation’: Auxin Solar’s CEO on his industry shaking tariff petition

"Yeah, I've heard that. It's quite offensive for me to have heard that we're not a new kid on the block. But folks who make those accusations should do some research," Rashid told Renewable Energy World's John Engel in an interview for the Factor This! podcast.

He said that taking the risk associated with being the face of the AD/CVD petition has already resulted in psychological and financial retaliation. Key members of the Auxin Solar staff are receiving articles and social media posts disparaging the company from friends and family, and some companies no longer want to be associated with the Auxin Solar name.

Even the Auxin Solar servers have been hacked since filing the petition, Rashid added. "This is our effort to try to do the right thing. It could very well lead to our demise."

2012: Obama administration implements anti-dumping and countervailing duty 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.

Rashid said that opponents to its trade petition "have done a pretty good job of associating our name with just negative connotations of tariffs or whether it's a bad impact for the adoption of renewable energy, our jobs in the solar industry. So they've done a pretty good job… it has had a negative impact."

The Solar Energy Industries Association, which has aggressively fought the latest AD/CVD case, has called Auxin's petition "frivolous" and acused the company of abusing U.S. trade laws to benefit a single company.

Subscribe today to the all-new Factor This! podcast from Renewable Energy World. This podcast designed specifically for the solar industry launches May 9th with a deep-dive breakdown of the Auxin Solar tariff petition, including the impact to PPA markets and corporate net-zero targets.

Three-quarters of solar companies responding to a SEIA survey reportedly said that panel deliveries have been canceled or delayed in the days since the U.S. Commerce Department took up the petition.

SEIA said in a press release that more than 90% of the 200 companies that responded to its survey said that the Commerce Department’s actions are having a “severe or devastating impact” on their bottom line. 

The industry trade group said that all market segments — residential, commercial, community solar, and utility-scale solar — “overwhelmingly reported” devastating or severe impacts from the investigation. Survey respondents included SEIA members and non-members.

“This investigation is based on a meritless trade case that is hammering the solar industry in real-time and diminishing our efforts as a country to tackle climate change,” said Abigail Ross Hopper, SEIA’s president and CEO, in a statement sent to Renewable Energy World. “This is yet another attempt to abuse U.S. trade laws and cause serious economic harm to the American solar industry and its 230,000 workers, shockingly, all at the behest of a single company,” Hopper said.

Despite the threat to his company's survival, Rashid said he won't stop until the "entire supply chain" is reshored to the U.S. That may be a tall order.

A Department of Energy report on the state of clean energy supply chains found that the solar PV supply chain remains heavily reliant on China, but opportunities exist to embolden domestic manufacturing.

Chinese producers control 83% of global capacity for polysilicon production, 96% for wafers, 79% for cells, and 70% for modules, according to the Ultra Low Carbon Solar Alliance.

The DOE report said incentives could offset the higher cost of solar PV manufacturing in the U.S., which can be 30-40% higher.

Rashid said he supports the proposed federal Solar Energy Manufacturing for America (SEMA) Act that would provide incentives for domestic production of the entire solar supply chain.

The bill passed the U.S. House but is still waiting for approval by the Senate. The SEMA Act, and steps to form a domestic solar supply chain in the U.S., is the topic of Episode 3 of the Factor This! podcast. Subscribe here.

Host: John Engel 

Before this year, Few knew the name Auxin Solar. Even industry insiders weren't familiar with the San Jose-based manufacturer of about 150 megawatts of modules each year.

But the company's trade petition to the US Department of Commerce and the agency's subsequent investigation has upended the industry and made the company a target of the largest renewable energy trade groups.

The Biden administration has likewise been accused of turning its back on renewable energy and climate change ambitions just for taking up the case.

So what led this relatively small solar module manufacturer to become the face of a trade fight that threatens its own survival?

Coming up, the first extensive interview with Auxin Solar CEO Mamun Rashid,

You're listening to Factor This!

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I'm John Engel from Renewable Energy World. This is the first episode of Factor This! --- a podcast designed specifically for solar industry leaders. I'm really happy you're here and I hope you'll subscribe to follow along with us.

We're beginning this podcast with a four-episode series on the Auxin Solar anti-dumping and countervailing duties petition with the US Department of Commerce. Trade groups and analysts have estimated as many as 18 gigawatts of projects could be delayed as a result of the investigation into additional tariffs, making it solar's most critical issue over the next year.

In February 2022, Auxin Solar alleged that Chinese solar module manufacturers were skirting US trade lines by finishing modules in Vietnam, Malaysia, Cambodia, and Thailand before exporting them to the states.

The Department of Commerce rejected a similar request the year before from a group of anonymous solar module manufacturers because those companies refused to identify themselves, citing the risk of retaliation.

Since Auxin's petition met all the requirements, federal law requires Commerce to take a look.

Auxin Solar CEO Mamun Rashid discussed his reason for filing the petition, and why his own company could close as a result of taking on the fight. And for the first time, he addressed allegations that his company is a front for a larger domestic solar manufacturer's tariff campaign.

Now, Mamun Rashid.

Host: John Engel

Can you start with your name and what you do?

Auxin Solar CEO Mamun Rashid 

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

Host: John Engel 

Mamun, tell me about your background, how'd you end up at Auxin?

Auxin Solar CEO Mamun Rashid 

My background is in computer chip design. So, I used to design computer chips, flash memory chips, and we are in Silicon Valley. So that's what I used to do up until around 2007 or so 2008 when the financial crisis happened.

I was going into semi-retirement mode and then a few of us looked at what was going on in the country. We knew nothing about manufacturing. I need to say that I'm a computer geek, I can sit behind a computer all day long. But I know nothing about a hammer and the nail and all of that good stuff.

So, 2008 happens. We look at this and say, it's folks like us, we come up with great ideas. When it comes to volume manufacturing, we get on an airplane and go to Asia to have it manufactured. So we said, you know, what can we do our little part to bring the manufacturing jobs back here?

Solar came about because at one of my previous startups, we had a lot of wasted wafers that I found out get reprocessed for solar cells. And that piqued my interest.

I said, alright, let's look at this subject. And we did some research. We predicted, correctly, that solar would become a commodity and the silicon price would keep coming down. The cost of manufacturing would not dominate the cost of making a solar panel, it will be dominated by the bill of materials.

So it did make sense to manufacture in the US and in Silicon Valley. It would be okay because the OPEX will be a very small percentage. So that's how Auxin was born. But my background is in silicon chip design.

Host: John Engel 

So moving on to the AD/CVD petition, when you first filed that a lot of people said: "Who?" They didn't know who you are. So what pushed you to get involved in trade issues?

Auxin Solar CEO Mamun Rashid 

That's a great question because I have seen that where 'who's Auxin? Do they even make panels? How long have they been around?' And all that the reason nobody's heard about us is we are a contract manufacturer.

So, one of the things when we started Auxin, we said, what happens if we turn the tables around where we usually go to Asia to do what you call OEM manufacturing, where you have a contract manufacturer out there, and they will make.

Let's take PCs as an example. They'll make a Dell computer out there, a Compaq, and even a Mac and put it on a US company's label. What if you had Asians and other companies that want to do contract manufacturing, but they want to make a US product? That was the premise of it.

So we said, we're not--again, remember, we predicted that (solar) would become a commodity. So, we didn't want to spend any money on brand name recognition. There were plenty of names already out there on the market. We said, how can we be the most cost-effective manufacturing here. What we found is let's not spend any money on marketing and brand name recognition, we'll just make it as low cost as possible, put somebody else's label on it. That's why nobody has heard of us. But the folks who haven't heard of us have very likely used our products that we've made. And we were happy with that.

It came to a point where we have seen in the last more than a decade, a technology that was invented in America, that was perfected in America, and the entire supply chain of the solar module, completely get decimated and exit. We are the oldest crystalline solar module manufacturer in the US. We've survived all this time. But it's come to a point, we're in an existential situation; that's an existential threat. If something is not done, this will be it, it will be gone forever. You can almost say it's gone now, how do you bring it back, but you can still bring it back. But if we're done and out, and we don't do something we're done, as far as solar manufacturing in the US.

So, we felt it's imperative for us to come out, take the risk, and try to do something about this and at least call for an investigation if cheating was going on; if circumvention of our existing US trade laws was going on. So, that's what we came up with. And so people are surprised: 'who is Auxin.'

Host: John Engel 

So, then take me behind the scenes. When was that moment that you decided we have to get involved?

Auxin Solar CEO Mamun Rashid 

It was in the last several quarters when we're seeing some of the trade policies that were put in place. And we saw the positive impact of those trade policies. I'm talking specifically about the Section 201 tariffs-- we saw amazing results in a very short period, US multi-gigawatts reshored of manufacturing in the US. And our vision, by the way, is not just module manufacturing, it's the entire supply chain. We feel we won't stop until we see the entire supply chain reshored. But we want to make sure investing in American manufacturing is a safe bet. And that's what this is all about.

So, over the last few quarters, we've been watching what's happening, then we saw a previous petition that got rejected. If something isn't done right now, we will be done. We're okay in the sense that we also make custom panels, highly customized panels, that others can't make. So, on the same factory floor, you've got your run-of-the-mill panels that dominate the industry but you've also got your Ferraris that are made here that nobody else can make.

Once we saw the data, it looked very suspicious. And that's why we made the request to Commerce to look at the data as well.

Host: John Engel 

Were you involved at all with the previous petition?

Auxin Solar CEO Mamun Rashid 

We watched it closely to see what happens. But we were disappointed that it was dropped because of, I think, what Commerce said is the companies that were involved in (it) wanted to be anonymous because they were afraid of retaliation. So, it's turned out that was true, that the retaliation is real. And it's very painful as a company for our workers who are very confused at what they're seeing what their friends and families are sending their way.

At the same time, we're not afraid. We've been at it long enough. We've survived through many ups and downs. Somebody's got to do it. It's gotten to the point where I've told employees--some key employees--to stop looking, just ignore it, and ignore the friends and families that are sending them posts that they see. That's all I can say right now.

It has had a pretty negative impact psychologically, but also materially. It also has had an impact because people are afraid to place orders with us because the folks who are against us have done a pretty good job of associating our name with just negative connotations of tariffs or whether it's a bad impact to the adoption of renewable energy, our jobs in the solar industry. So they've done a pretty good job. A lot of people associated, you know, the vilification that's happening It's working, and it has had a negative impact.

Host: John Engel 

Are you referring to the trade groups?

Auxin Solar CEO Mamun Rashid 

Absolutely. Very irresponsible messaging, because we have to take a bigger picture here. All we're asking for is to level the playing field for the American manufacturer, the American worker. But when you've got products that are coming in below the cost of the bill of materials, the American worker hasn't even had a chance. They've lost the race before even entering the race.

If cheating is going on, we don't know that ourselves, the data looks very suspicious. We're not the ultimate say in this, the Commerce Department has the ultimate say. So, if we've just called for initiation of the investigation, that's all that's happened. But all this reaction, all this potential job loss, again, I don't know if that's true. I'll wait to see the data.

You know, we've been around long enough to see other trade cases be presented and other tariffs come in. We have not once seen any of those predictions come true. As far as it's going to slow down the industry, it's going to increase the costs. None of it has come true. So let's see what happens this time, you know, we'll see.

Host: John Engel 

is fighting this a threat to your survival as a company?

Auxin Solar CEO Mamun Rashid 

Yes, it is our securities… we've also been hacked Our security servers have been hacked. It is exactly our effort to try to do the right thing. It could very well lead to our demise.

Host: John Engel 

You know, an interesting narrative that's formed since you filed this petition and since Commerce announced that they would look into it, is that the Biden administration is out to get renewable energy; that it's turned its back on the solar energy industry. When in reality, we know that in these trade cases, if a petition meets all the requirements, Commerce has to look into it by law.

Is that at all frustrating for you that this entire conversation has been framed as Auxin Solar and the Biden administration are out to get solar?

Auxin Solar CEO Mamun Rashid 

When is it okay to not abide by the law? Well, it comes down to that if a law is broken, a law is broken, it's never okay, because of some other goal to break the law. When you come to a stop sign, and it's 2 am in the morning, in your neighborhood, you stop at the stop sign. There are no other cars, that's the law.

So, to have this type of reaction, and to conclude, what is the White House against renewable energy adoption or whether Auxin Solar, a tiny company affecting tens of thousands of jobs? It's not about that. it's our laws being broken. if they are, we shouldn't be tolerating laws being broken.

The bigger picture is, are we going to say, oh, it's important to adopt renewable energy? Oh, it's important to have the tens of thousands of jobs. But if that requires us to look the other way, in case laws are being broken, I just don't see how that's ever okay. Not in America. It's one of the things that makes us great. At the end of the day, we are law-abiding citizens and we have to let the process work out.

What are we doing? We're simply going over from dependence on the Middle East (for oil) to dependence on other nations. I just don't think that's a smart thing to do. For future generations, you're giving up energy independence. It's a national security issue. Look at what's happening in Europe or in Ukraine right now, an action by (Russian President Vladimir) Putin is highlighting our vulnerability to not being energy independent. And we are shouting and screaming at a company that's trying to say, let's not let this happen again, in the renewable energy sector?

It blows my mind.

Host: John Engel 

There has been a lot of speculation, whether publicly or behind the scenes in the industry, about your motives in bringing this petition. Some have suggested that a large domestic manufacturer, without naming names, is bankrolling your effort, is providing legal help, is pushing you to lead the charge so that they don't have to face the brunt of the criticism. Is there any truth to that? Did anyone encourage you or help you get started on this petition outside of Auxin Solar?

Auxin Solar CEO Mamun Rashid 

Yeah, I've heard that. It's quite offensive for me to have heard that we're not a new kid on the block. But folks who make those accusations should do some research, other than reading the headlines and reading the Twitter beats, use their brain cells a little bit. Do the research.

We've been around since 2008. We've seen all the ups and downs. It's not about a quick buck. If it was we wouldn't be doing manufacturing in the US. We'd be manufacturing elsewhere. We're a truly American company, an American manufacturer. We don't have any foreign ownership. We never took our production elsewhere. We don't bring in white label panels from elsewhere to have an American version and a less or more cost-effective version from Asia so we can win projects. No. 

What we say about American manufacturing, we will live and die with this conviction. So, to now be a front for somebody else, just doesn't jive with our company. And, like I said, it's very insulting to see those.

We haven't said anything. We'll let all the noise happen. When I get a chance like this and in this kind of a forum, I would certainly explain but I'm not going to get into going arguing back and forth trying to make our points.

Let people say what they want.

Host: John Engel 

Mamun Rashid. Thank you.

Auxin Solar CEO Mamun Rashid 

Thank you very much, John, really appreciate the opportunity.

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Host: John Engel 

Thanks again to Auxin Solar CEO Mamun Rashid.

In all of this debate about his company's tariff petition in the past few months, we haven't heard his perspective. I'm glad he gave us that chance.

Mamun's trade attorney joined us for our interview and didn't plan to speak. But I think there's value to hearing about their legal approach to the AD/CVD case while providing a history of solar tariffs in the US before we go too much further.

Here's Thomas Beline.

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Tom Beline, partner Cassidy, Levy, Kent

Host: John Engel 

Okay, so Thomas, let's start in 2012 when we had that first round of tariffs. What was going on there during the Obama administration?

Trade attorney Thomas Beline

In 2012, it was determined at that point that the way that the anti-dumping and countervailing duty rules would work was wherever the cell was made, that would confer the duty application. And so the cells were then offshored out of China, but modules are still being made in China using subsidized build materials. And you know, they were getting cells from Taiwan at that point, predominantly. And it was necessary to have a follow on case.

Host: John Engel 

Okay, so the follow on case in 2015, attached to modules as well.

Trade attorney Thomas Beline

Exactly, no matter where the cells were from.

Host: John Engel 

Alright, now, let's jump ahead to 2018 then in the Trump administration, what was going on?

Trade attorney Thomas Beline

So in 2018, the Trump administration puts in place the Section 201 tariffs and quota. And basically what that was, was a tariff rate on all modules from around the world wherever they were produced, and duty-free importation of cells up to 2.5 gigawatts for use in producing modules here in the US from important cells.

Host: John Engel 

So, then we arrive at the Biden administration to round out the last three administrations implementing or continuing tariffs. What has the Biden administration done so far?

Trade attorney Thomas Beline

Earlier this year, President Biden chose to extend the Trump safeguard, and he makes the decision to extend it in part, revoke it in part and enlarge the quota.

Host: John Engel 

And the "revoke in part" was the bifacial (exemption).

Trade attorney Thomas Beline

Correct.

In 2015, Auxin created domestically, the bifacial production here in the US as one of the only producers of bifacial (modules). Ironically, one of the companies that purchased that bifacial panel from Auxin during that period was one of the companies that petitioned the Trump administration in 2019, to exclude bifacial.

And when Mamun (Auxin's CEO) joined with a couple of other parties at that point to push for the revocation of that exclusion and was successful up until a court decision said that the Trump administration acted unlawfully, and then the Biden administration basically, you know, continued the exclusion on a go-forward basis, basically, you know, rendering the safeguard to be of little value because of how people moved to bifacial.

One of the things that we found out during the course of the safeguard extension proceeding was certain companies in Southeast Asia were advertising basically bifacial panels that had a back sheet to them in a lighter format so that they could be installed on residential rooftops where the other side wasn't ever going see any daylight at all. And it was just a blatant way to circumvent the safeguard and qualify for the bifacial exclusion.

Host: John Engel 

Are you at all surprised at how contentious this whole thing is gotten?

Trade attorney Thomas Beline

Look, I think when there's money on the line; because this is what this is really all about, it's people's profit margins. You know, people are going to argue what's in their best interest. I mean, you know, Mamun laid it out earlier, you know, that when we presented him the data to suggest that circumvention was going on, you know, he considered whether to follow through with the case because of what it might mean for his ability to have a return on investment. I think the same considerations go for those who are opposed.

And you know, what's really remarkable, John, when I look at it, is I don't hear a lot of them saying, 'there's no cheating going on here.' I hear a lot about how unfair it is that Auxin could file a case, or how Auxin is so small, or who's bankrolling this for them. And like, it's not as if somebody's saying, you don't need to look into this because none of us are cheating, none of us are avoiding the application of the law.

I feel like that's a missed opportunity for these other folks who, you know, want to be pushing for people to act lawfully, I will say that this is not out of the ordinary for them. I mean, it was last year when one of the groups came up with their blueprint for how to avoid using forced labor in acquiring panels and silicone material from China. That felt a little bit, I don't know, forced, because, oh, a couple of weeks later, the US Customs and Border Protection starts looking into forced labor issues.

I mean, so wait, it took us that long to say human rights are important to us?

So, I feel like these groups are a little bit delayed in how they're acting when it comes to, you know, pushing for us to take climate change very seriously, which we should but they're willing to cut corners on, just as Mamun said, applying the law.

They're willing to look the other way enforce labor issues, they're willing to look the other way when we're losing American workers in the manufacturing space. It to me it just all rings to the truth that it's all about profitability on these types of projects. And that's unfortunate.

Host: John Engel 

A big thanks to Mamun Rashid and Thomas Beline for joining the podcast.

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Host: John Engel 

Next time on Factor This!

Lightsource BP Americas CEO Kevin Smith:

I'm in our headquarters this week actually trying to address this issue. You know, do we put more investment into the US or is there better investments of other parts of the world because we don't have to deal with the political risk?

Host: John Engel 

The entire point of Factor This! is to bring you other perspectives. So Auxin Solar's won't be the last you hear on the tariff case.

That was Kevin Smith, Lightsource BP America's CEO. He says the oil-major-backed utility-scale developer is having difficult conversations about the path forward in the US.

Our conversation on the next Factor This!

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Host: John Engel 

Thanks for listening to Factor This! I'm John Engel.

You can find me on LinkedIn and Twitter. Factor This! is a production of Clarion Events and Renewable Energy World.

Please subscribe anywhere you get your podcasts and leave a review. We're excited to see what you think.

Show notes episode transcripts, source materials and video interviews from Factor This! are available at renewableenergyworld.com

We'll see you next time.

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