USA Solar Import Duties Lead To Unexpected Outcomes And Opportunities

USA Safeguard Duty on Solar Panel Imports 

The Trump administration’s imposition of Section 201 safeguard duties on imports of solar panels is leading to unexpected outcomes which are not all necessarily benefiting the US manufacturing industry which it was meant for.  Some of these implications are:

1) Exempt countries to try and leverage the export opportunity – A large number of countries such as Pakistan, India, Turkey, and Brazil etc. are exempt from these duties and the manufacturers in those places can export solar panels to the USA without any duties. These countries could not export earlier due to the cost differences with Chinese and SE Asian countries, but now with a 30% difference, they have a big chance to export large quantities given that the USA is the second largest market in the world.  Pakistan has reportedly invited Trina Solar to set up a manufacturing plant in their country to export solar panels to the USA. India is another country with an 8 GW module capacity that could look to sell solar panels into the US market. Most of this capacity is lying unutilized and large companies such as Tata, Vikram, Waaree, and Adani can look to sell panels into that country.

Also, read India’s Proposed Safeguard Duty On Solar Panels Sets The Cat Among Pigeons

2) More trade wars – South Korea has also been seriously hurt by these duties even though they were targeted at China and other SE Asian countries. South Korea is making a huge hue and cry and seems set to go to the WTO to appeal against the Section 201 duties. Even China has condemned the duties and may seek to go to the WTO.

3) Bonanza for 2.5 GW solar cell quota sellers–  2.5 GW of solar cell imports will be exempt from these duties giving them a huge 30% advantage. With the USA having almost no large-scale solar cell capacities, most solar cells will continue to be imported.

4) Thin film players to get a huge boost – Thin film solar panels are not under the purview of the duties which mean they can freely sell into the US market at a 30% advantage. First Solar and Solar Frontier are the only large thin film companies left with most others going bankrupt. These companies will get a big boost as they can get higher prices for their products in the USA market. Some small players will also be able to sell into the USA market though not many have capacities large enough to benefit sufficiently.

You might also like to read: Global Solar Growth Shoots Through The 100 GW Mark Growing 26% In 2017

Besides these unexpected outcomes, some Chinese companies such as Jinko Solar are actively looking to quickly set up module assembly plants in the USA. The duty advantage may not remain for a long time as the duties are going to go gradually to zero after 4 years. A long-term sustainable industry may not come up in the USA but opportunistic cheap assembly plants could be set up to take advantage of these duties. Solar manufacturers in the USA which had capacities will also get a temporary boost as their cost disadvantage will not be big enough. However, if they can compete in the long term is doubtful.