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[Federal Register Volume 75, Number 164 (Wednesday, August 25, 2010)]
[Notices]
[Pages 52322-52323]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2010-21115]

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DEPARTMENT OF ENERGY

Office of Energy Efficiency and Renewable Energy

Nationwide Limited Public Interest Waiver Under Section 1605 (Buy 
American) of the American Recovery and Reinvestment Act of 2009 
(Recovery Act)

AGENCY: Office of Energy Efficiency and Renewable Energy, U.S. 
Department of Energy (DOE).

ACTION: Notice of limited waiver.

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SUMMARY: The U.S. Department of Energy (DOE) is hereby granting a 
nationwide limited waiver of the Buy American requirements of section 
1605 of the Recovery Act under the authority of Section 1605(b)(1) 
(public interest waiver), with respect to the following solar photo-
voltaic (PV) equipment: (1) Domestically-manufactured modules 
containing foreign-manufactured cells, (2) Foreign-manufactured 
modules, when comprised of 100 percent domestically-manufactured cells, 
and (3) Any ancillary items and equipment (including, but not limited 
to, charge controllers, combiners and disconnect boxes, breakers and 
fuses, racks, trackers, lugs, wires, cables and all otherwise 
incidental equipment with the exception of inverters and batteries) 
when utilized in a solar installation involving a U.S. manufactured PV 
module, or a module manufactured abroad but comprised exclusively of 
domestically-manufactured cells that will be used on eligible EERE- 
Recovery Act funded projects. This waiver expires on February 6, 2011, 
six months from the day it took effect.

DATES: Effective Date: August 6, 2010.

FOR FURTHER INFORMATION CONTACT: Benjamin Goldstein, Energy Technology 
Program Specialist, Office of Energy Efficiency and Renewable Energy 
(EERE), (202) 287-1553, Department of Energy, 1000 Independence Avenue, 
SW., Mailstop EE-2K, Washington, DC 20585.

SUPPLEMENTARY INFORMATION: Under the authority of the Recovery Act, 
section 1605(b)(1), the head of a Federal department or agency may 
issue a ``determination of inapplicability'' (a waiver of the Buy 
American provisions) if the application of section 1605 would be 
inconsistent with the public interest. On November 10, 2009, the 
Secretary of Energy delegated the authority to make all inapplicability 
determinations to the Assistant Secretary for Energy Efficiency and 
Renewable Energy, for EERE Recovery Act projects.
    Pursuant to this delegation, the Assistant Secretary has determined 
that application of section 1605 restrictions would be inconsistent 
with the public interest for incidental and/or ancillary solar 
Photovoltaic (PV) equipment, when this equipment is utilized in solar 
installations containing domestically manufactured PV cells or modules 
(panels).
    Specifically, this public interest determination waives the Buy 
American requirements in EERE-funded Recovery Act projects for the 
purchase of the following solar PV equipment: (1) Domestically-
manufactured modules containing foreign-manufactured cells, (2) 
Foreign-manufactured modules, when comprised of 100 percent 
domestically-manufactured cells, and (3) Any ancillary items and 
equipment (including, but not limited to, charge controllers, combiners 
and disconnect boxes, breakers and fuses, racks, trackers, lugs, wires, 
cables and all otherwise incidental equipment with the exception of 
inverters and batteries) when utilized in a solar installation 
involving a U.S. manufactured PV module, or a module manufactured 
abroad but comprised exclusively of domestically-manufactured cells. 
This waiver expires on February 6, 2011, six months from the day it 
took effect.
    Solar cells are the basic building block of PV technologies. The 
cells are functional semiconductors, made by processing and treating 
crystalline silicon or other photo-sensitive materials to create a 
layered product that generates electricity by absorbing light photons. 
The individual cells are assembled into larger groups known as panels 
or modules. These two terms are synonymous and used interchangeably in 
this memorandum. The panel is the end product, and consists of a series 
of solar cells, a backing surface, and a covering to protect the cells 
from weather and other types of damage. A solar array is created by 
installing multiple modules in the same location to increase the 
electrical generating capacity. Operational solar PV modules and arrays 
use cells to capture and transfer solar-generated electricity. The 
solar modules and cells represent the highest intellectual content and 
dollar-value items associated with solar PV energy generation.
    The Buy American provisions contain no requirement with regard to 
the origin of components or subcomponents in manufactured goods used in 
a project, as long as the manufacturing occurs in the United States [(2 
CFR 176.70(a)(2)(ii)]. However, determining where final 
``manufacturing'' occurs is in the context of the complex solar 
production chain is complicated. Under a plain reading of the Recovery 
Act Buy American provisions, only the modules would need to be 
manufactured in the United States, but the source of the components 
parts--including cells--would not be relevant to complying with the Buy 
American requirements.
    EERE and the National Renewable Energy Laboratory have conducted 
extensive research into the nature of the domestic solar manufacturing 
industry to determine the best way to apply the Buy American 
requirements for solar PV projects. EERE considered three basic 
options: (1) Follow the current interpretation of the Buy American 
provisions and require that only the modules be produced in the United 
States, irrespective of the origin of the cells contained in the 
modules; (2) apply the interpretation that the modules and cells are 
distinct manufactured goods and thus both must be produced in the 
United States; or (3) choose a more inclusive approach that allows a 
solar installation to comply if either the cells or the module are 
manufactured in the United States.
    Because of the dynamic nature of the solar PV manufacturing sector, 
the number of manufacturers given below is

[[Page 52323]]

approximate. EERE is aware of companies in the process of moving 
manufacturing capacity into and out of the United States, and new 
companies may emerge that were not included in the most recent round of 
research. As a result, these numbers may fluctuate. In addition, thin-
film solar PV modules are not covered by this waiver, as grantees have 
stated, and EERE's research has confirmed, that these products do not 
meet the specifications for most Recovery Act projects funded by EERE. 
In the event that a thin film installation is being purchased with EERE 
Recovery Act funds, then it would meet the Buy American provisions as 
long as the modules were manufactured in the U.S.
    Option 1 is consistent with the current interpretation of the Buy 
American provisions, which are satisfied as long as final manufacturing 
takes place in the U.S. However, if EERE were to choose Option 1, there 
would be only four companies producing solar PV modules in the United 
States that could sell their products to EERE grantees. If Option 2 
were chosen, the market would be even more limited, with only two 
companies producing both the cell and the module in the United States. 
Finally, for Option 3, an additional five companies would be able to 
compete for grantees' solar PV projects in addition to the four that 
produce modules, bringing the total U.S. marketplace benefit to nine 
companies.
    This public interest waiver affirms EERE's determination that the 
manufacturing process for cells and the final PV module production 
represent distinct and significant stages in the solar PV manufacturing 
chain. Conducting either of these discrete activities in the United 
States creates roughly equal numbers of American jobs. The design and 
manufacture of the cells also captures the largest portion of the 
intellectual property present in a solar array. Designing and 
increasing the efficiency of cells is high-value work that directly 
affects the end product. EERE believes the public interest is best 
served by supporting the domestic cell manufacturing industry at this 
time. It is therefore in the public interest to issue a waiver of the 
Recovery Act Buy American provisions that allows grantees to purchase 
foreign modules made with domestically-manufactured cells, in addition 
to domestic modules with foreign-produced cells.
    Because the Assistant Secretary believes strongly in increasing the 
domestic PV manufacturing capacity in the United States, she is 
limiting the duration of this waiver to six months from the date it 
goes into effect, with the expectation that there will be an increase 
in the number of companies that produce modules in the United States 
containing domestically-manufactured cells.
    This public interest waiver determination also resolves questions 
regarding the applicability of the Buy American provisions to numerous 
individual manufactured goods that are incidental in cost and 
technological significance but are ultimately incorporated into the 
final solar installation. These items, such as charge controllers, 
combiners and disconnect boxes, breakers and fuses, racks, trackers, 
lugs, wires, and cables, but excluding inverters and batteries, are 
generally low-cost incidental items that are incorporated into the 
installation of PV modules and arrays on public buildings and public 
works. This public interest waiver for all incidental and ancillary 
items eliminates potential questions and ambiguities concerning whether 
the incidental items are final manufactured goods or merely components 
of a larger solar module or array.
    Issuance of this nationwide public interest waiver recognizes 
EERE's commitment to expeditious costing of Recovery Act dollars by 
enabling recipients to easily ascertain whether a given solar 
installation complies with the Buy American provision. Simultaneously, 
this waiver advances the purpose and the principles of the Buy American 
provision by focusing on the highest-value and most labor-intensive 
pieces of solar PV equipment.
    Having established a proper justification based on the public 
interest, EERE hereby provides notice that on August 6, 2010, a 
nationwide public interest waiver of section 1605 of the Recovery Act 
was issued for ancillary solar Photovoltaic (PV) equipment as detailed 
supra. This notice constitutes the detailed written justification 
required by Section 1605(c) for waivers based on a finding under 
subsection (b).
    This waiver determination is pursuant to the delegation of 
authority by the Secretary of Energy to the Assistant Secretary for 
Energy Efficiency and Renewable Energy with respect to expenditures 
within the purview of her responsibility. Consequently, this waiver 
applies to EERE projects carried out under the Recovery Act. This 
waiver expires on February 6, 2011, six months from the day it took 
effect. Furthermore, the Assistant Secretary reserves the right to 
revisit and amend this determination based on new information or new 
developments.

    Authority:  Pub. L. 111-5, section 1605.

    Issued in Washington, DC on August 16, 2010.
Cathy Zoi,
Assistant Secretary for Energy Efficiency and Renewable Energy, U.S. 
Department of Energy.
[FR Doc. 2010-21115 Filed 8-24-10; 8:45 am]
BILLING CODE 6450-01-P
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