As trade protections ramp up in the USA, solar panel manufacturing is reportedly being impacted in some south-east Asian countries.
The USA has previously sought to protect its local manufacturing through the introduction of tariffs on Chinese cells, whether or not assembled into modules. In addition to other duties, that tariff rate increases from a substantial 25% to a whopping 50% this year.
The way around these tariffs for some Chinese manufacturers was to set up solar panel manufacturing in other countries, including Cambodia, Malaysia, Thailand and Vietnam. But in April this year, a group of US manufacturers requested the International Trade Commission issue a determination that the domestic solar industry had been injured by cut-price panels produced by Chinese companies in these countries. The ITC is due to vote this Friday.
According to announcement in May from the White House, the U.S. Trade Representative, the Department of Energy and the Department of Commerce is closely monitoring solar panel import patterns and will explore all available measures to act against unfair practices. But it’s not as though they didn’t know what was going on prior.
President Joe Biden implemented a 24-month period free of the tariffs in June 2022 to give Chinese-owned solar manufacturers in these countries time to move their supply chains (preferably to the USA) and to accelerate solar deployment – and that ended this week. Panels from these sources that have been stockpiled will need to be used within 6 months, or be subject to the duties.
So, the writing has been on the wafer for quite a while.
According to SeekingAlpha, Longi reportedly began slowing panel production at its plant in Malaysia this week, and stopped all five production lines at a Vietnam manufacturing facility last week. Trina Solar is reportedly shutting down capacity in Thailand and Vietnam. But this doesn’t mean they’ll miss out on the US market.
Longi, under the banner of Illuminate USA, is ramping up production at its new 5GW facility in Ohio. Trina Solar is building a 5GW plant in Wilmer, Texas, which is expected to be operational this year. Other major players based in China that have or are building solar panel manufacturing facilities in the USA include JA Solar and JinkoSolar.
A report released by the USA’s SEIA yesterday shows the huge uptick in US panel manufacturing, initially triggered by the Inflation Reduction Act of 2022.
11GW of the 27GW total came online during the first quarter of this year. That’s astounding growth.
Could Australia Do Something Similar?
While we don’t have the economic clout or capacity of the USA, the Albanese Government wants to give increased local solar manufacturing a red-hot go. In March, the Prime Minister announced $1 billion in government funding to lift production of solar panels and source materials made in Australia under the Solar Sunshot program.
As for whacking huge tariffs on panels made by Chinese companies, could is one thing, should is another. It likely wouldn’t have the same effect as it has had in the USA. And given how dependent Australia is on China for trade, poking the bear in this way would probably not end well for us.
For all the flak that China cops, it shouldn’t be forgotten that without affordable, good quality solar panels and other related kit from that country, many of the millions of Australian households saving big on their power bills with PV systems may not have them.
Check out the cost of solar in the USA vs. Australia here – it’s eye-popping stuff. It will be interesting to see how much of a difference all the new production capacity and current glut in the US makes to prices of home systems there in the months ahead. Or perhaps the USA’s comparatively high prices are just because America sucks at selling solar.
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