No US solar shortage this year, says IHS

Share

Higher solar costs resulting from a long-running global PV battle between the U.S. and China over antidumping and subsidy charges will not lead to a solar shortage in the U.S. this year, according to a recent report by analysts IHS Technology.

The wide-ranging ramifications of the ongoing investigations led by the U.S. International Trade Commission (ITC) are likely to result in equipment price hikes, but the U.S. will have enough tariff-free capacity to avert any PV shortage in 2014.

The current investigation is looking into closing a loophole whereby Chinese PV companies have sought to circumvent antidumping and countervailing duties imposed in 2012 by using third-party suppliers of PV cells located in Taiwan. A decision from the ITC is not expected until October at the earliest, and if – as expected – the commission determines there is cause to impose further penalties, the U.S. would almost certainly be faced with rising cell and panel prices.

But a careful study by IHS has deemed that the current U.S. market has sufficient capacity to handle any aggravating factors. Its research found that globally, some 57.8 GW of production capacity for crystalline solar cells and thin-film solar modules exists in 2014, of which 11.2 GW is located outside of China and Taiwan.

That 11.2 GW portion of the market would be exempt from U.S. trade enquiries meaning, with a further 6.1 GW of global thin-film capacity available, there is more than 17 GW of tariff-free solar capacity available to the U.S. market in 2014.

Expert projections forecast the U.S. will install close to 6.5 GW of PV capacity this year, leading IHS to conclude that there is no danger of any impending solar shortage. "While 2014 U.S. solar installations shouldn't be severely impacted even if broader penalties were to be assessed against Taiwanese – and effectively, also Chinese – PV suppliers, antidumping duties imposed on such a significant portion of supply will have a noticeable effect on the U.S. solar market," said IHS senior analyst for solar demand, Wade Shafer.

Price pressure

The cheapest modules available in the U.S. at present are all Chinese-made modules that comprise Taiwanese cells, ranging from between $0.62 cents to $0.65 cents per watt. Prices for non-Chinese modules are higher, often above $0.70 cents per watt. IHS estimates that, should the final outcome of the ITC trade case result in further punitive tariffs, Chinese modules prices could increase to $0.75-$0.80 cents per watt.

The U.S. represents China's third-largest PV market after its own domestic market and Japan, so preserving that status will be of paramount importance to Chinese solar companies.

"To maintain their market share in this region, the Chinese may have to pass on a portion of their margin to customers and also offer better financing conditions in order to remain competitive, despite punitive tariffs," said Stefan de Haan, IHS' associate director for the solar supply chain. de Haan added that many Chinese solar companies are upping their shipments to the U.S. in advanced anticipation of October's decision – a move that will provide them with a buffer of a few months, should the worst-case scenario occur.

"In the midterm, however, price increases appear unavoidable if antidumping duties are, in fact, implemented," cautioned de Haan. "And in view of the importance of the U.S. market, Chinese companies are expected to ramp up manufacturing facilities in the North America Free Trade Agreement (NAFTA) zone, particularly in Mexico."

Last year, Chinese solar companies employing the Taiwan loophole sidestep accounted for 42% of the U.S. solar market, with six of the top 10 solar module suppliers to the States either based in, or operating the bulk of their manufacturing from, China.

American solar firm First Solar, however, remains the No. 1 module supplier to the U.S. industry, with fellow domestic producer SunPower in fifth, sandwiching China’s Yingli, Trina and Canadian Solar in between. SunEdison, ReneSola, Suntech, SolarWorld, and ET Solar complete the top 10.

Popular content

This content is protected by copyright and may not be reused. If you want to cooperate with us and would like to reuse some of our content, please contact: editors@pv-magazine.com.

Share

Related content

Elsewhere on pv magazine...

Leave a Reply

Please be mindful of our community standards.

Your email address will not be published. Required fields are marked *

By submitting this form you agree to pv magazine using your data for the purposes of publishing your comment.

Your personal data will only be disclosed or otherwise transmitted to third parties for the purposes of spam filtering or if this is necessary for technical maintenance of the website. Any other transfer to third parties will not take place unless this is justified on the basis of applicable data protection regulations or if pv magazine is legally obliged to do so.

You may revoke this consent at any time with effect for the future, in which case your personal data will be deleted immediately. Otherwise, your data will be deleted if pv magazine has processed your request or the purpose of data storage is fulfilled.

Further information on data privacy can be found in our Data Protection Policy.