It is difficult to separate the hyperbole from the truth as the U.S. solar industry feels the effects of multiple trade issues that will determine its future.
Reporting from Wood Mackenzie suggests that just the Dept. of Commerce’s investigation (not a final ruling) into alleged tariff circumvention by Southeast Asian solar panel manufacturers will eliminate 16 GW of solar panels from the U.S. supply chain — an amount equal to almost the entire volume of utility-scale solar installed across the country in 2021. Advocacy group SEIA is also estimating that the solar industry will lose 70,000 of its 231,000 jobs because of the DOC investigation. Add in continued supply interruptions from a U.S. Customs withhold release order, COVID shutdowns and now a war in Ukraine, and optimism falls further into the background.
Or does it? Is the sky really falling? It depends on what market you’re in and how well you’ve planned for 2022, said the developers, installers and suppliers Solar Power World spoke to. One thing is certain: the second half of this year is going to look a lot different than what everyone predicted.
Future planning in limbo
The latest Chicken Little saga comes amid the DOC investigation, as requested by California-based solar module assembler Auxin Solar. Auxin claims that Chinese crystalline silicon solar panel makers have moved portions of their manufacturing operations to Southeast Asia to circumvent antidumping and countervailing duties (AD/CVD) that have been in place since 2012. Commerce is looking into solar panel operations in Cambodia, Malaysia, Thailand and Vietnam to see if Chinese wafers, aluminum frames, backsheets and more have been used in exported cells and modules. If enough Chinese product is found in Southeast Asian module exports, DOC could extend the AD/CVD to the mentioned countries.
Already, module supply from Southeast Asia — a region that supplied 80% of U.S. demand in previous years — has been limited or completely halted. A survey to SEIA members found that 75% had solar panel deliveries canceled or delayed within a few days of the DOC starting its investigation at the end of March. Almost all those surveyed were predicting this investigation to have a severe or devastating impact on their businesses.
Commerce is expected to present preliminary findings of its investigation on August 30, 2022, along with a preliminary duty rate for all importers of the affected products, should the department find fault. A final decision would then be made on January 26, 2023. That timing of August to January is tricky for those purchasing large quantities of modules, as Q3 2022 is when most begin buying for 2023 projects. Will there be enough supply, and how much will it cost?
Trying to prepare for 2023 is where community solar developer Nexamp is focused right now, said director of supply chain Bilal Ahmed.
“We’re buying …….