Buy America vs "Buy American" Compliant Solar Panels

Question:

We have a customer interested in 72 cell 340 solar panels, or similar, that are "Buy America" and not "Buy American" compliant. This is for PA government job. Over the discussion he made a point of saying "Buy America" is different from "Buy American" in that it doesn't allow trade partner nations products as much. So, if he is right, Korean modules wouldn't be allowed.

Do you know of this difference and if there are any panels that follow this rule? Or just in general?

Answer:

Navigating the “Buy America” and “Buy American” requirements that are attached to US Government projects, can be quite confusing. First of all, your customer is right regarding the “Buy America Act”, in that the Act does not allow waivers for favored nation trading partners that are signatories of the Trade Agreements Act (TAA), North American Free Trade Act (NAFTA), or other free trade agreements. However, under the “Buy American Act”, waivers are allowed for favored nation trading partners who are signatories to these free trade agreements, in addition to others.

If your customers contract with the State of Pennsylvania requires the solar modules to be “Buy America Act” compliant, then he will only be able to install modules that are made here in the United States. Unfortunately, after the start of the Trump Tariff on solar modules, there are few to no choices of module manufacturers to choose from that are making “Buy America Act” compliant modules in the US. If you consider that cells make up 60% of a modules cost, and the there are few to no US manufacturers of cells as of today, then technically there are no US module manufacturers that are “Buy America Act” compliant.

What most solar contractors do in this particular situation, is to ask the contracting officer who issued the contract, to do a modification of the contract, changing the “Buy America Act” compliant requirement to “Buy American Act” compliant. When the contracting officer does that, then there are US manufacturers that meet the requirement that can provide the modules.

To provide some perspective, the US Government themselves make solar modules in a Federal Prison, using convict labor. Even those modules, made in a US Federal Prison, are not “Buy America Act” compliant. However, the majority of the modules made in the prison module factory, are considered “Buy American Act” compliant, and are used on US Government projects, and US Government funded state projects, around the US.

If your customer would want to offer the contracting officer a “Buy American Act”e work with Mission Solar, a manufacturer in Texas, for solar modules used on “Buy American Act” compliant projects. There are a couple of manufacturers that make 60 cell modules in the US, that also make their own cells, making their 60 cell modules “Buy America Act” compliant. But your customer would have to ask for a change in the spec and contract, so it might be easier for him to request a change to the contract requirement from “Buy America Act” compliant, to “Buy American Act” compliant.

Buy America Act

The Buy America Act is the popular name for a group of domestic content restrictions that attach to specific funds administered by the Department of Transportation (DOT).  The Buy America provision of the Surface Transportation Assistance Act of 1982, 23 U.S.C. § 313, state that the Secretary of Transportation “shall not obligate any funds authorized to be appropriated to carry out the Surface Transportation Assistance Act . . . unless steel, iron, and manufactured products used in such project are produced in the United States.”  These funds are used to make grants to states and other non-federal government entities for various transportation purposes.

There are Buy America Act regulations with different standards for the Federal Highway Administration (FHWA), Federal Transit Authority and other DOT agencies. Simply because a product is manufactured in the United States or meets the requirements of one domestic content rule does not mean it meets the requirements of another agency’s Buy America Act provisions.

Nationwide waivers of the Buy America Act exist for narrow areas (e.g., ferryboat construction) but determining whether an item falls on the list is no easy task. Waivers for specific contracts are also available, such as under FHWA’s Buy America regulations, but are rarely granted due to the high standards required for a waiver.

Buy American Act

Separate and distinct from the Buy America Act is the Buy American Act, passed by Congress in 1933 (and implemented by FAR part 25). Unlike the Buy America Act, the Buy American Act only applies to “federal” procurement. It does not apply to DOT funded state/local projects because, while the source of the money for those projects is federal, such purchases are not made directly by the federal government. The Buy American Act prohibits the Government from acquiring an article, material or supply for public use within the United States that is not a domestic end product, and allows only domestic construction materials to be used for public use subject to certain exceptions. The Department of Defense has created exceptions to the Act by negotiating memorandum of understandings with foreign governments.

Importantly, the Buy American Act does not apply to products covered by the Trade Agreements Act, NAFTA, or other free trade agreements. The Buy America Act, in contrast, has no waivers for countries that have a trade agreement with the United States.