Wednesday, August 10, 2022

Tariffs, seizures highlight US solar industry’s import sensitivity

Cheap imports have fueled the dramatic growth of the US solar industry for years. According to industry representatives, rising trade and transportation issues are now highlighting the reliance on slowing shipments and putting larger projects at risk.

The dire availability of foreign panels could hurt a booming industry and backfire on President Joe Biden’s effort to decarbonize the country’s power sector, which is central to his plan to tackle climate change. According to the US Energy Information Administration, about 90 percent of US solar panels are made overseas.

Among the issues tarnishing Solar’s outlook is an attempt by US officials to block shipments of panels containing components potentially obtained from forced labor in China’s Xinjiang region.

According to an industry source, the Biden administration imposed an import embargo targeting China’s Hoshine Silicon Industry Co in June, and since then, hundreds of megawatts of panels have been detained at the border.

US Customs and Border Protection would not disclose the number of solar products it has detained. China denies that its solar components are made by forced labor.

At the same time, a small domestic solar manufacturing industry has submitted an anonymous petition to the US Commerce Department to impose new tariffs on some imported panels over allegations of dumping products at artificially low prices.

The Commerce Department is expected to make a decision this week whether to consider the request, which would affect imports from Vietnam, Thailand and Malaysia.

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According to the US Solar Energy Industries Association (SEIA), if implemented, those tariffs would jeopardize 18 gigawatts of solar projects by 2023, or enough to power more than 3 million homes.

The small group of domestic solar makers say they remain anonymous because disclosing their names “could lead to retaliation against these companies and cause substantial harm.” The group’s lawyer, Tim Brightbill, said SEIA’s claims were “wildly exaggerated”.

However, US solar developers say that suppliers in Southeast Asia have already cut sales in the United States, fearing that their panels could be hit with a retroactive levy if the Commerce Department moves forward.

supply squeeze

Sea shipments of solar modules to the United States were already down 11 percent in August compared to 2020 and down 2 percent for the first three weeks of September, according to data from financial information provider S&P Global.

“We’re being hit hard right now,” Markus Wilhelm, chief executive of solar project developer Strata Solar, said during a press call organized by SEIA on Monday. “We are completely dependent on a global supply chain, so we are a little more vulnerable.”

“We can’t get the module manufacturers today to sign the purchase orders that we need to deliver projects in the near term,” George Hershman, president of solar contractor Swinnerton Renewable Energy, said on the call.

Issues of a global supply squeeze stemming from the coronavirus pandemic, which has already battered other industries with rising costs and delays, are affecting everything from bicycle sales to smartphone availability.

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The US solar industry said earlier this month that its installation was progressing at a record pace despite shipping bottlenecks and a jump in costs, but new threats raised the risk of a future recession.

Top renewable energy developer Nextera Energy Inc., backed by EDF Renewables Inc., Clearway, Invenergy and Enel Green Power, has pushed against the new duties in a comprehensive filing with the Commerce Department.

In addition to the immediate threat of new duties, the US International Trade Commission will decide by the end of this year whether to extend the tariffs imposed by the Trump administration on all foreign-made panels in 2018.

Five domestic producers requested expansion, including Korea’s Hanwha Q Cell and LG Electronics’ US arms.

Zincosolar, one of the world’s largest panel makers, is caught in the crosshairs of both a border seizure and the prospect of new tariffs.

The company said earlier this month that some of its solar panels were withheld by US Customs at the border. The company is also among Chinese companies targeted by domestic petitioners seeking new tariffs.

Roth Capital Partners analyst Philip Shen lowered his price target on JinkoSolar’s stock to $51 from $58 on Sept. 16, citing a “one-two punch.”

JinkoSolar did not respond to a request for comment.

by Nicola Groom

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This News Originally From – The Epoch Times

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