Trade tariffs old and new mean US will face PV module supply crunch, says Jigar Shah

Share on facebook
Facebook
Share on twitter
Twitter
Share on linkedin
LinkedIn
Share on reddit
Reddit
Share on email
Email

The latest round of trade tariffs could create a module supply crunch and clog up the US PV project pipeline, according to SunEdison founder Jigar Shah.

Shah, who is also the President of the Coalition for Affordable Solar Energy (CASE), has warned that panel prices will rise from next year. This could in turn make some projects uneconomical, while in the future module supply itself could become a challenge.

“The 2012 tariffs will come into [full] force at the end of this year. All of the appeals and so on are exhausted. If the manufacturers have to pay for those tariffs module prices in the US will immediately go up,” Shah told PV Tech.

“This new case will have an influence on the old one because any modules with Taiwanese cells will be subject to the new tariffs. In 2012 SolarWorld wasn’t smart enough to include the Taiwanese cells. The Department of Commerce has used unprecedented power, to our knowledge, to actually widen the scope of the trade case beyond what SolarWorld asked for. So starting 1 January next year we will have unprecedented increases in modules prices,” he said.

Shah predicts increases of around five cents per watt resulting in some utility-scale projects no longer being viable.

With the US set for a spike in demand in 2016 ahead of the Investment Tax Credit falling from 30% to 10%, Shah is concerned that US will not be first choice for manufacturers that are able to pick and choose where they export to.

“That’s the amazing thing, solar is becoming the largest business in the electrical generating sector and the US, which is manufacturing a shortage of panels, is going to become the least friendly market to export panels too,” Shah said.

Shayle Kann, senior VP at GTM Research, predicted smaller panel increases but a similar end result.

“We are looking at likely flat to slightly increased pricing in the US while the rest of the world sees price declines,” Kann told PV Tech. “And flat pricing alone is enough to render uneconomic a number of utility-scale projects in the US, many of which are operating under razor-thin margins.

“With regard to a 2016 module shortage, it depends how demand shakes out in the rest of the world. 2016 will certainly be a boom year for US solar demand ahead of potential ITC [Investment Tax Credit] expiration, so there will be a huge need for module capacity to serve demand. And while there will certainly be more than enough technical capacity to serve that demand, it is true that other markets, such as Japan, could be preferential for suppliers if they are strong enough to enable full supplier utilisation.

“So regardless of whether a shortage does occur, the price of available supply will be just as important and will certainly be impacted by the new round of tariffs,” Kann concluded.

This impact could mean a weakening of US firms' bargaining position when negotiating pricing and reduced choice as some firms able to sell their full output opt for tariff-free export markets.

Cost

The additional costs will not be passed on to investors who Shah says will expect to continue to be offered quoted prices. That leaves the industry to absorb the costs.

A frustrated Shah expressed concern that this could create uncertainty come 1 January while attempts, if any, are made to find a settlement. This process would likely take four to six months.

“That’s unacceptable – 150,000 people, many of whom are blue collar workers will not know whether they have a job that day. That is ridiculous,” said Shah.

So who does benefit from the decision?

“Nobody. There’s not  single person who will win out of this. This is just going to leave a bad taste in everyone’s mouth. The only person this is good news for is Frank Asbeck but I don’t think it is good news for his shareholders,” said Shah.

26 January 2022
Join this free webinar for our analysis of the growth of N-Type technology including; new capacity expansions and production output. We'll also be looking at the global manufacturing footprint with forecasts on how much product will be made outside of China this year and which companies are driving technology change across the crystalline silicon value chain.
23 February 2022
Held annually since 2016, the Energy Storage Summit Europe is the place to be for senior stakeholders in the European storage industry. Designed to accelerate deployment of storage, we examine evolving chemistries, business models, project design, revenue stacks and use cases for storage. The 2022 edition will include exclusive content around longer duration solutions, energy strategies for wide-scale deployment of EVs and "EnTech", the event which sits at the intersection of digitisation, decentralisation and decarbonation of the power system. Come to meet TSOs, DSOs, Utilities, Developers, Investors and Lenders and leave with new contacts, partners and a wealth of information.
7 March 2022
Take your chance to join the most powerful platform in the MENA region. Middle East Energy (MEE), Intersolar, and ees, the leading energy exhibitions are joining hands to co-deliver an outstanding renewables and energy storage event at Middle East Energy 2021. Renewables and energy storage at MEE is the largest gathering of solar and renewable energy industry professionals in the Middle East & Africa, offering the most effective trade focused platform to international manufacturers and distributors looking to meet regional buyers.
8 March 2022
As Solar Finance & Investment enters its ninth year, we sit on the cusp of a new power market with solar at its heart. The 2022 edition of the event will build on our years of expertise and relationships to bring investors and lenders together with top developers. Connect with leaders in the field and use exclusive insights to drive investment and development decisions for the future. Meet new and existing project partners at the largest gathering of European solar investors and lenders.
23 March 2022
When it comes to storage, the US market exceeded a gigawatt of advanced energy storage installations (weighted towards lithium ion) at 1.46 GW, more than the previous six years in total! An exponential growth rate could see the market hit 7.5 GW p.a. by 2025. The summit will provide a wealth of content around this vital piece in the US power puzzle, with sessions dedicated to explore how companies are making money from batteries, the latest chemistries and their applications as they apply to different use-cases. We ask how investors can match ESG criteria to batteries and we will bring case studies of successful deployment and project execution onto the stage to examine how you can ensure your own projects are successful.
29 March 2022
Now in its 10th sell-out year, Large Scale Solar returns to Lisbon in 2022. We are excited to gather together face-to-face with the European solar industry as we provide unique and exclusive access to a powerful selection of the market's key stakeholders. Join this elite summit to find out how the market is maturing, which new markets are becoming more exciting, how technology is evolving and who's driving the market forward into the 2020s. Always senior, packed with developers, EPCs, utilities and investors this is the event for companies serious about European solar PV.

Read Next

January 25, 2022
Regulators in Nevada have paved the way for two solar-storage hybrid projects to replace a legacy coal power plant in the US state, approving their sale to utility NV Energy.
January 25, 2022
The Czech Republic’s largest utility, ČEZ Group, should scale up its domestic solar PV portfolio over the next decade instead of pursuing new nuclear power plants, the Institute for Energy Economics and Financial Analysis (IEEFA) has said.
January 25, 2022
SK Ecoplant, part of the South Korean conglomerate SK Group, has signed a US$200 million joint venture (JV) agreement with Vietnamese rooftop specialists Nami Solar for the development of 250MW of rooftop solar in Vietnam over the next four years.
PV Tech Premium
January 25, 2022
European solar power purchase agreement (PPA) prices can be expected to level off this year following a turbulent end to 2021 as the market undergoes a shift in the balance of power to the seller side.
January 25, 2022
Indian PV encapsulant and backsheet manufacturer RenewSys has brought its encapsulant production capacity up to 3GW with the commissioning of a new line in Bengaluru, India, with the company eventually targeting 11GW of capacity through a “phased manner”.
January 25, 2022
A consortium including Saudi solar developer ACWA Power has inaugurated the 500MW Ibri 2 solar project in Oman, which becomes the country’s largest utility-scale solar project to date.  

Subscribe to Newsletter

Upcoming Events

Upcoming Webinars
January 26, 2022
Free Webinar
Solar Media Events
February 23, 2022
London, UK
Solar Media Events
March 8, 2022
London, UK
Solar Media Events
March 23, 2022
Austin, Texas, USA
Solar Media Events
March 29, 2022
Lisbon, Portugal