Solar energy in America .. Most of the planned capacity during 2022 is at risk - Energy

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  • 64% of US planned solar capacity is in doubt
  • Solar energy in America affected by the Commerce Department’s investigation into Asian imports
  • Added solar capacity in America may fall to its lowest level since 2019
  • Commodity prices put pressure on US solar companies

The US solar industry is facing additional pressures, on the back of a US Department of Commerce investigation into Asian imports, as well as rising global raw material prices.

And energy research company Rystad Energy sees in a report issued on Tuesday that about 17.5 gigawatts of solar projects in America planned during 2022 are at risk, after the Commerce Department opened an investigation into imports of panels from Southeast Asia.

It was expected to install 27 gigawatts of solar power in America this year, but with soaring commodity prices and the new threat of tariffs on key imports, 64% of these additions are in doubt.

This comes amid accusations of China circumventing tariffs by taking some Asian companies as a cover to evade anti-dumping duties, as well as US companies’ concern about strengthening the position of Chinese manufacturers, who use cheap raw materials.

Ministry of Commerce investigation

In a 2012 investigation of Chinese manufacturers, the United States imposed anti-dumping and countervailing tariffs, at various rates, with the most common being 30.66%.

On March 25, the US Department of Commerce launched an investigation into imports of solar panels in America from Southeast Asia, related to the use of equipment produced by Chinese companies that are subject to customs duties.

US authorities are investigating imports from 4 Southeast Asian countries that play a pivotal role in the US solar market: Cambodia, Malaysia, Thailand and Vietnam.

Imports from these countries accounted for 85% of the total solar panels imported by the United States in 2021, amounting to 21.8 gigawatts, and the share increased to 99% in the first two months of 2022.

In response, Chinese manufacturers of solar panels have halted shipments to America, until the results of the investigations are announced, with a preliminary ruling due in August and a final decision by January 2023.

Solar Energy - America

repercussions of the investigation

With imports frozen pending investigation results, annual solar added capacity in America may drop to its lowest level since 2019, at 10.07 GW this year, compared to 22.6 GW last year.

If the US Commerce Department decides to extend the tariffs, imported equipment will be allowed after the investigation is announced, but the tariffs may be retroactive to imports since last November, according to the report.

Between November and February 2022, US buyers imported $1.46 billion worth of solar panels from the four Southeast Asian countries under investigation.

This means that Chinese suppliers could incur any additional tariffs of between $365 million and $3.6 billion, according to Rystad Energy.

American companies hurt

Solar companies in America are feeling the effects of the investigation: although the threat of sanctions could spur suppliers to boost manufacturing capacity for solar equipment, it would take at least 18 months to build a domestic supply chain from polysilicon to the panel.

Even before the investigation, America’s solar energy industry was under great pressure; High commodity prices, uncertainty about tax credits and unfavorable policies.

This included the US administration’s decision last December to ban imports of goods from the Xinjiang region in northwest China; Because of reports of human rights abuses against the Uyghur people.

The decision halved the number of US solar panel imports, with 40% of the world’s silicon production located in Xinjiang.

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