The US is not likely to become a cost competitive producer of solar modules anytime soon as it faces relatively high labor and energy costs, says TrendForce that sees the country continuing to rely on foreign imports in the future even as a 2-year anti-circumvention waiver boosts installations in the short term.
The analysts argue that the US Department of Commerce (DOC) ruling in the anti-circumvention tariffs against imported solar products is likely to have no tangible impact on solar demand in the country, but it is the government's ban against Xinjiang-related products that should warrant more attention.
According to the Taiwanese technology market intelligence firm, since the 2-year exemption on solar cells and modules imported from Vietnam, Cambodia, Thailand and Malaysia remains till June 6, 2024 that need to be installed at project sites before December 2024, the DOC ruling will have little bearing in the short term (see US Finds Chinese Companies Dodging Circumvention Tariffs).
Hence, analysts expect major growth in installation demand over the next 2 years. It will come from projects deferred, high electricity prices and supportive government policies like the Inflation Reduction Act (IRA). For 2023, TrendForce forecasts the US to install around 35 GW to 40 GW new solar.
The Xinjiang matter, on the other hand, is leading to shipments being piled up at the US ports requiring major paperwork by manufacturers to prove the modules do not have any Xinjiang trail (see North America PV News Snippets).
The good news is that now there is 'subjective view' being taken by the US Customs and Border Protection (CBP) in the matter since recently JinkoSolar was able to enter the country after proving it used Wacker Chemie polysilicon.
Reliance on foreign imports is a compulsion for developers here thanks to a lack of complete solar supply chain within the country at present. Costs will rise further if the anti-circumvention probe continues and leads to further import restrictions in the future.
TrendForce points at high labor and energy costs in the US that makes it unlikely for solar companies here to be able to cut down their manufacturing costs in the near future to roll out cost competitive products. Hence the dependence on foreign imports is anticipated to continue.
Going forward, a lot also depends on the outcome of US Presidential elections in 2024. It remains to be seen if the next administration will continue to prioritize solar and renewables in general with subsidies.
"In sum, TrendForce believes the US government will continue to be "open-minded" about PV products imported from factories in China and other countries at least during the next two to three years," it added.