In the second quarter of 2024, the United States experienced an unprecedented surge in solar panel imports, setting a new record as shipments flooded into the country. According to S&P Global Market Intelligence’s Global Trade Analytics Suite, U.S. imports reached 17.4 GW, representing a substantial 36% increase from the same period in 2023. This surge was primarily propelled by factories in Vietnam and Thailand, which emerged as the largest contributors to the influx of photovoltaic (PV) modules. The previous record for quarterly imports stood at 15 GW, achieved in the final quarter of 2023 and nearly matched in the initial quarter of 2024.
Racing Against the Clock
The significant rise in imports came on the heels of President Joe Biden’s decision to grant a two-year tariff waiver on solar cells and modules from Southeast Asia in 2022. This waiver enabled the industry to circumvent duties previously imposed on Chinese-made PV shipments that were found to be evading U.S. tariffs. Since the waiver’s introduction, the volume of solar component imports has tripled, showcasing the industry’s swift response to the relaxed restrictions. As the waiver approached its expiration in June 2024, manufacturers and developers scrambled to import as many panels as possible in anticipation of potential new tariffs. Vietnam spearheaded the charge, shipping approximately 7.3 GW of solar panels to the U.S. in the second quarter, constituting 41.6% of total imports during that period. This marked a significant increase from the 5.4 GW imported in the first quarter. Thailand followed with 3.8 GW, accounting for 22.1% of the total imports, while Malaysia, India, and Cambodia contributed 12.5%, 11%, and 6.4%, respectively. Key importers during this period included affiliates of China-based Trina Solar Co. Ltd. and Arizona’s First Solar Inc.
Amid this surge, the U.S. solar industry is witnessing a wave of new domestic factories, spurred by Biden’s Inflation Reduction Act of 2022, which are now competing for a share of the growing market. However, U.S. manufacturers, who have poured billions of dollars into their operations, have raised concerns about the sharp increase in imports. They argue that the spike in crystalline-silicon cell and panel imports from Southeast Asia, particularly Thailand and Vietnam, poses a severe threat to the survival of U.S. producers.
The U.S. Solar Industry’s Battle: Domestic vs. Imported
The American Alliance for Solar Manufacturing Trade Committee, comprising major players like First Solar and Qcells, lodged a “critical circumstance” petition with the U.S. Commerce Department. The petition calls for a swift assessment to determine whether the sudden influx of imports warrants retroactive duties before the department concludes its ongoing investigation into Southeast Asian imports. The committee contends that these imports are being rushed into the country to evade the imposition of antidumping and countervailing duties. Dumping, a practice where products are sold at unfairly low prices below the cost of production, is at the core of their concerns.
This petition comes at a critical juncture as the U.S. strives to establish a robust domestic supply chain for its rapidly expanding solar industry, which remains heavily reliant on imports. In response to these challenges, President Biden recently raised the cap on the volume of solar cells that can be imported without triggering a 14.25% tariff. The new cap, increased from 5 GW to 12.5 GW, was a response to a September 2023 petition from domestic industry representatives who argued that U.S. cell production was insufficient to meet demand, necessitating reliance on imports in the short term. Following the Alliance’s petition, Clean Energy Associates (CEA) forecasted that a favorable outcome could lead to a bottleneck in the supply of solar cells in the U.S., potentially driving up the prices of both domestically produced and imported solar modules by up to $0.15/watt. Given the U.S.’s heavy reliance on Southeast Asian countries for its solar cell supply, the potential impact of these tariffs looms large.
Rising Prices, Falling Costs and the Shifting Landscape of U.S. Solar Manufacturing
Despite the looming challenges, it is noteworthy that prices across the PV supply chain have markedly decreased in recent years. Consequently, solar modules now represent a smaller proportion of the overall cost of a solar project compared to previous years. This decline in prices could help offset the impact of any potential price increases on the solar market.
The U.S. solar industry is undergoing a period of transition, with domestic module manufacturing expanding at a rapid pace. A report identified 31 GW of U.S. module manufacturing capacity that is either operational or in the process of scaling up. This includes facilities from First Solar and Qcells, as well as U.S. branches of China-based PV companies like Trina Solar (U.S.) Inc. However, the report also underscored the absence of U.S. manufacturing for solar cells and wafers. Qcells aims to address this gap by launching an integrated 3.3-GW ingot, wafer, cell, and panel complex in Georgia later this year.
As the U.S. navigates these intricate dynamics, the resolution of the ongoing trade disputes and the future of domestic manufacturing will be pivotal in shaping the nation’s capacity to build a resilient and self-reliant solar industry.
