Renewed calls for antidumping tariffs could raise solar module prices, hamper growth of domestic manufacturing: Clean Energy Associates

What you need to know

• The application of new tariffs to solar cell and module imports from Southeast Asia, as requested by a coalition of U.S. solar manufacturers, could raise the price of imported solar panels in the U.S. by 15 cents per watt.

• Prices for U.S.-made modules could rise 10 cents per watt, according to an analysis released Tuesday by Clean Energy Associates and the American Council on Renewable Energy.

• Growing domestic capacity for solar module assembly means the U.S. could make many of its own solar panels by 2025, according to Clean Energy Associates.

• However, cell manufacturing capacity has not kept pace, which means many U.S.-based module factories remain dependent on imported cells from Southeast Asia.

Why this matters: Analysts from Clean Energy Associates say the threat of new tariffs—regardless of the ultimate outcome of the investigation—could endanger financing deals for new solar manufacturing capacity in the U.S.

The details

The request by a coalition of U.S. solar manufacturers for a federal investigation of imported solar panels from Southeast Asia could prove counter productive and ultimately slow the growth of domestic manufacturing, analysts from Clean Energy Associates and ACORE said Tuesday.

According to analysis by Clean Energy Associates, commissioned by ACORE, the U.S. solar supply chain appears to be in good health today thanks in part to the rapid growth of domestic solar module assembly capacity. While at least some of the projects announced to date may never break ground, Clean Energy Associates anticipates that module capacity in the U.S. could reach 60 GW by 2027, Dan Shreve, vice president of market intelligence for Clean Energy Associates, said.

But the story for solar cell manufacturing is somewhat different. Clean Energy Associates projects that cell manufacturing capacity in the U.S. will top out at 12 GW by 2028, Shreve said. That gap will leave the U.S. in need of some 41 GW of imported solar cells to support its new module factories, Shreve said.

“There's a lot at stake here as it applies to making those domestic U.S. factories run, and run at a cost that makes them competitive,” Shreve said.

As with the last anti-circumvention investigation in 2022, solar suppliers have already begun to call developers to inform them that they can no longer deliver product at previously prices, said Christian Roselund, a senior policy analyst at Clean Energy Associates. That likely reflects a very real possibility of 10-15 cent increases in the cost of solar module, he said.

But the uncertainty that accompanies the unresolved investigation could bring even greater risk than the proposed tariffs themselves, Roselund said. Like solar developers, a module factory that plans to use imported cells must build the price of those materials into its cost structure—and its applications for financing. Uncertainty about the cost of solar cells could lead to these projects being delayed, or outright canceled, for lack of financing, he said.

Similar tariffs in the past, Roselund said, have not led to an increase in domestic manufacturing but have instead pushed manufacturing capacity to other, lower-cost countries.