The U.S. Solar PV Trade Investigations: What Do We Know Now?

The U.S. Department of Commerce (DOC) has released its preliminary findings for both the anti-subsidy (CVD) and anti-dumping (AD) investigations concerning Chinese and Taiwanese solar PV components. These investigations came about as a result of complaints, led by SolarWorld, of perceived unfair competition.

The investigations undertaken this year are supplementary to the previous CVD/AD investigation finalized in Q4’12, which was confined specifically to Chinese-produced c-Si PV cells. The new case can be considered an expansion in scope because the 2014 investigations include other PV components (i.e. c-Si wafer, ingot, and module); as well extending the geographic scope to Taiwan. Now that the preliminary results have been released, we can start to assess the potential impact on the U.S. solar PV market, as well as the global supply chain.

The U.S. market had been largely unaffected by the 2012 investigations as Chinese producers were able to shift their supply-chain to use Taiwanese cells and thus avoid import duties. The current decision effectively closes this supply route and means manufacturers in China must consider other possibilities if they want to continue supplying the U.S. market. However, given that the outcome has been in the works for some time and was anticipated to be upheld, it is likely each of the leading Chinese suppliers has a number of contingency plans already considered and awaiting implementation. Module prices in the U.S. have already seen increases and could rise further if supply is significantly disrupted.

Duties on Chinese products from the 2012 case range from 23.75-35.97% for named manufacturers while 2014 duties on Taiwanese products range from 27.59-44.18%. This effectively means that there is little value in Chinese producers continuing to source Taiwanese cells for U.S.-bound products. In 2013, this amounted to over 2 GW of cell production and as such could impact sales pipelines for Taiwanese c-Si cell manufacturers.

The final decision in the 2014 investigations has been delayed by approximately four months. This increases the time under which the U.S. industry will operate in a period of uncertainty. While some module suppliers have indicated that they will continue shipping into the U.S. market, others may take a wait-and-see approach and attempt to minimize shipments into the U.S. until the final decision is reached. This could create short-term supply shortages as inventories in the U.S. are depleted and new stock is delayed.

Over the next few months, it will be become clear what contingency plans had been under review over the past 12 months. Not just from the Chinese suppliers, but the installers and developers in the U.S. who have relied upon Chinese supply in the past. New fabs outside China and more collaborative approaches to using strategic partners outside of China and Taiwan are just two of the options that could become more prevalent.

Solarbuzz.com