The World's #1 Renewable Energy Network for News, Information, and Companies.
Untitled Document

How Short-Term Shipment Delays Could Impact US Solar Market

Two weeks after a trade ruling deepened the rift in an increasingly divided industry, analysts and CEOs alike are still working to assess how the newly imposed trade tariffs will impact shipments, projects and pricing.

There’s a growing acceptance that Chinese companies will work around the tariffs by sourcing solar cells from places like Taiwan before shipping panels into the United States. That move alone would add about 10 to 12 percent additional cost to each module. While an IHS iSuppli analysis recently pointed out that such a shift would in the long-term add only 3.5 percent to the total cost of a ground-mounted installation, it could have other short-term impacts.

According to Michael Sheppard of IHS Research, the anti-dumping penalties of about 31 percent on most major Chinese manufacturers could significantly slow down solar module shipments the country sends to North America. IHS had earlier projected that 2 gigawatts (GW) of modules imported into the U.S. in 2012 would come from Chinese suppliers. That figure would represent about 60 percent of American module imports. Rather than ship right away, many manufacturers now need to set up or strengthen existing supply chains to navigate their way around the tariffs. According to Sheppard, “this could represent the temporary removal of up to 1.5 GW worth of stopped shipments to the region, accounting for 45 percent of the total market in 2012.

That could do a couple of things. First it will help to clear out excess inventory already in the U.S. Sheppard is currently working to assess how big that volume is. It could also cause developers of some larger projects to renegotiate contracts or reconsider where they get their modules. In markets like Germany, large-scale projects can easily amend their module choice, but in the U.S., especially on federal land, a switch in modules requires a resubmission of paperwork. Many of these issues could make developers and financiers increasingly wary in the next few months as some of these pricing and timing issues start to play out.

For some companies, the DOC’s anti-dumping announcement was harsher than anticipated, but it was something for which they had been planning. In the days after the ruling, Trina Solar was among those that said they were going to remain a player in the U.S. market and that they would use their global supply chain to their advantage. The larger Chinese manufacturers are the ones that are best prepared to reorient themselves to the changing American market, if they haven’t done so already.

On the other end of the shipment chain is groSolar, an engineering, procurement and construction firm that deals with large commercial and utility-scale installations. The company’s CEO, Jamie Resor, said in an interview that his company made the switch to modules that did not include Chinese made cells earlier this year when it became apparent that tariffs could disrupt the supply chain.

But even with the switch, it’s been hard for companies like groSolar to pinpoint exactly what the price impacts of the tariff are and will be. This is especially true because of the many factors currently clouding the PV market — from overcapacity, to trade issues to uncertain policies.

It’s becoming clear, though, that the tariff has the potential to turn those Taiwanese cells into a hot commodity. The newfound demand could push up cell prices, and in turn, make the Chinese modules that much more expensive to import. Many Taiwanese cell makers, though, are currently running at about 50 percent capacity, said Sheppard, so they’ll be able to quickly ramp up production. Whether costs will rise is harder to predict. That’s a concern, says Resor, but the biggest issue facing the industry is the disruption that could be felt everywhere from downstream manufacturing to project financing.

“We’ve had a lot of growth, and we’d like to keep the momentum,” he said.

Others, meanwhile, are seeing the tariffs as a business opportunity.

Roger Little, chairman and CEO of Spire Corp., headquartered in Bedford, Mass., is hopeful the new duties and the expected short-term slowdown in imports will lay the groundwork for a new era of American solar manufacturing. If so, that could help his company sell equipment for manufacturing lines in the U.S.

So far, the company has done its biggest business in China with companies like LDK, JA Solar and Suntech. His hopes are that some of those established Chinese manufacturers would decide to set up smaller facilities in America where they’d be closer to the market and could operate without the threat of tariffs.

There are growing questions, however, about whether this would really be the best option for Chinese companies, whose revenues have fallen dramatically in the wake of overcapacity and European policy collapse. Suntech already has a relatively small operation in the U.S., and LDK is facing talk of bankruptcy.

Even if polysilicon solar panel manufacturing doesn’t expand significantly in the U.S., Little sees a growing opportunity with thin films. While thin films are generally cheaper panel for panel, they are also less efficient, meaning you need more of them to make up for the more efficient polysilicon panels. But the plummeting cost of the polysilicon Chinese panels has eroded much of that cost difference. From Little’s perspective, the new tariffs, or any price hikes that come from circumventing the tariffs, could push at least some of the market toward thin film. That’s a bet the Department of Energy put down when it decided to back loan guarantees to thin film manufacturers like Abound Solar and SoloPower. The DOE also backed large-scale solar generating projects that source First Solar’s thin-film panels.

“The U.S. has moved heavily in the direction of thin films with tremendous investment,” said Little. “But when silicon panel prices plummeted, [many of the big manufacturers] pulled back.”

Now, he expects to see some American thin film manufacturers increase their production to serve the U.S. market. Even so, most of the leading thin film companies manufacture outside the U.S., with First Solar’s main CdTe facility in Malaysia and Solar Frontier’s CIS operation in Japan. But there remain hopes within some corners of the industry that manufacturers like Abound Solar will rebound, and eventually boost production. And energy giant GE is already planning a major push into thin film.

“Now with the duty, they’ll come out of the woodwork, and hopefully we’ll see thin film lines set up,” said Little.

Untitled Document

Get All the Renewable Energy World News Delivered to Your Inbox - FREE!

Subscribe to Renewable Energy World Magazine and our award-winning e-Newsletter to stay up to date on current news and industry trends.

 Subscribe Now



A Case Study in Energy-Transition Momentum

Tim King South Australia is clearly at the forefront of the global energy transition as it establishes a fast-moving model oth...

Listen Up: Can I Get Solar if my Roof is Shaded?

The Energy Show on Renewable Energy World Rooftop solar panels only work when they are in direct sunlight. So if you have a partially shaded roof, the output o...

US Senate Democrats Unveil Energy Bill That Restores PTC and Extends ITC

Brian Eckhouse, Bloomberg Senate Democrats unveiled a bill that would provide more tax credits for renewable energy while killing some tax ince...

US, China Solar PV Players Team Up, Invest $100M in Chile, Uruguay and Japan

Andrew Burger Private equity infrastructure specialist Hudson Clean Energy Partners and Hong Kong-based independent power producer ...


Solar Power World Ranks Florida Solar One a Top 400 Solar Installer

Florida Solar One, a Miami Fort Lauderdale solar contractor is ranked among the top sol...

US Solar Institute Chosen for Military Solar Training at Patrick Air Force Base

In August 2015, the Air Force chose The US Solar Institute (USSI) for a specialized sol...

Canadian Solar Signs Agreement with Mashiki Town and Kumamoto Prefecture to Build 47 MW Solar Plant in Japan

Canadian Solar Signs Agreement for 47 MW Solar Plant

NC State University Installs Student-Funded Spotlight Solar Structure to Drive Awareness and Adoption of Clean Energy

North Carolina State University (NC State) will today showcase its commitment to clean ...



Geothermal Visual: GEA, Clean Energy Organizations Tell Congress: We Need Tax Extenders 'As Soon As Possible'

In a letter dated Oct. 5, over 580 signatories representing clean energy industries, including Geothermal Energy Asso...

Why the Solar PV Industry Should Love Geothermal Heat Pumps Part 3

It’s a marriage made in heaven: Solar PV and Geothermal Heat Pumps Part 3 of a 6-Part Series Geothermal Heat ...

Beyond Utility 2.0: Part 4 “Next Steps”

Principles, Structure, and Policies of Energy Democracy Energy democracy can best be described as an electricity sy...



Volume 18, Issue 4


To register for our free
e-Newsletters, subscribe today:


Tweet the Editors! @jennrunyon



Successfully Integrating Solar: A Proactive Approach

•      What does the increasing solar penetrati...

Solar Power Northeast

  From the team that produced Solar Power Southeast and the sol...

Solar Power Asset Management and Performance

SEIA and SEPA collaborated with industry leaders to present the first ev...


SPI Brings Out The Best In Solar

Phew…...those cross-country flights sure take a lot out of a guy....

Join us at the New Solar Power Northeast

From the team that produced Solar Power Southeast and the sold out P...

Saving Vs. Gaining

Whenever I do a national keynote speech or customized coaching session f...


Renewable Energy: Subscribe Now

Solar Energy: Subscribe Now

Wind Energy: Subscribe Now

Geothermal Energy: Subscribe Now

Bioenergy: Subscribe Now