Acting on US solar module manufacturer Auxin Solar's petition filed in February 2022, the US Department of Commerce (DOC) says it will initiate an investigation into companies circumventing antidumping (AD) and countervailing duty (CVD) by importing crystalline silicon solar cells, whether or not assembled into modules from China, from Southeast Asian nations of Vietnam, Malaysia, Thailand and Cambodia (see Another Solar Tariff Petition In US).
Cowen's Jeffrey Osborne counts as much as 16 GW of potential supply shortfall over the next 5 years without supply from these 4 nations that currently account for 80% of the module supply to the US.
"The crux of the issue in our view is a potential delay in projects as developers will take time to find alternate module suppliers. Once those modules are secured, then tracker specs can be altered, which can add another few weeks of delays. We believe ~85% of US utility-scale projects use bifacial modules today, which would now be subject to these duties if they are made in the 4 countries under the investigation," added Osborne while assuming the DOC does impose the tariffs post investigation.
Retroactive tariffs may go as far back as November 4, 2021, opines Philip Shen of Roth Capital Partners who believes the US solar industry could sidestep the anti-circumvention tariffs through cell manufacturing within the US or in non-targeted nations which may come under its purview sometime in the future anyway.
While the preliminary determination by the DOC is expected within 150 days after the Federal Register Notice is published, which should be around August 29, 2022 providing clarity, Shen says it would lead to high module pricing and slow down module imports.
The Solar Energy Industries Association (SEIA) of the US, that has been a vocal critic of the Auxin Solar petition from the start, called it an attempt to abuse the US trade laws, something that can cause serious economic harm to the local solar industry 'at the behest of a single company'.
"This frivolous, self-interested petition could derail the entire American solar energy industry and disable efforts to tackle the climate crisis," said SEIA President and CEO Abigail Ross Hopper who added that the association will aggressively oppose the petition.
American Clean Power Association (ACP) expressed 'profound disappointment' with the decision against 'allied trade partners' from Southeast Asia, while calling on the Biden Administration to reverse the same.
"American workers will bear the pain of the decision to allow one rogue antagonist to abuse and manipulate trade laws for their own gain," said ACP CEO Heather Zichal in a sharply worded statement. "Without a reliable supply of solar modules while this investigation proceeds, project construction will grind to a halt, American workers risk being laid-off or furloughed, and we will miss our emissions targets – all so that another litigious manipulator can be proven unfounded yet again."
Meanwhile, Auxin Solar's Chief Executive Mamun Rashid welcomed the decision in a statement, reported by various media outlets saying, "We are grateful Commerce officials recognized the need to investigate this pervasive backdoor dumping and how it continues to injure American solar producers."
President Joe Biden led US government recently extended Trump era Section 201 tariffs on imported crystalline silicon PV cells and module for 4 years, leaving out bifacial solar tariffs, and now this investigation—all the while seeing solar PV as a critical resource to reach its 2035 decarbonization target (see US Extends Section 201 Tariffs).
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