The USA has reintroduced tariffs on low-cost solar imports from Asia following the end of a two-year moratorium on Thursday.
The reimplementation of these tariffs, which primarily affect Chinese-affiliated solar products exported from Southeast Asia, is seen as a crucial step in supporting US manufacturers, according to an analyst from Business Insider.
Mike Carr, Executive Director of the Solar Energy Manufacturers of America, stated that the end of the moratorium should help stabilise prices, benefiting developers, producers, and the entire market. He emphasised that this stability is essential for the industry.
In 2023, the Department of Commerce discovered that Chinese solar products were entering the US without duties, despite existing tariffs on Chinese imports. Chinese producers circumvented these tariffs by routing their products through Southeast Asia, which traded freely with the US.
To address this loophole, the Department of Commerce extended tariffs to these Southeast Asian regions. However, their impact was delayed due to the moratorium, which has now expired.
The moratorium was initially put in place due to White House concerns that tariffs might impede the US energy transition, given the nascent stage of domestic solar production. However, this led to a surge in cheap imports, causing a significant drop in solar prices last year.
Carr explained that Southeast Asian producers continued manufacturing despite halting trade during the Department’s investigation. When the tariff pause took effect, these producers flooded the market with their products, leading to an unprecedented supply glut.
“The volume of imports far exceeded previous levels, overwhelming our markets and creating massive uncertainty around pricing,” Carr said. “This situation led to significant investment challenges as prices continued to fall.”
The oversupply caused global solar panel prices to plummet by half last year, with China driving the surplus. Solar shipments from Southeast Asian producers have remained high, accounting for 87.5% of US module imports in the first quarter, according to S&P Global.
Carr suggested that the tariffs could help reduce market volatility and encourage investment in the sector.
David Feldman of the National Renewable Energy Laboratory mentioned additional positive developments for the domestic industry, including upcoming guidance on tax credits from the Inflation Reduction Act and trade adjustments to enhance US competitiveness.
Following the end of the moratorium, two major Chinese solar companies announced suspensions at their Southeast Asian facilities, as analysts predict a slowdown in import volumes, Reuters reported.
Meanwhile, US producers are advocating for more protections, with a coalition of manufacturers urging the Commerce Department to impose additional tariffs.
Carr indicated that the tariffs might lead to a 25%-30% price correction for solar modules, benefiting US producers. However, he noted that pricing should not be the primary metric for measuring the industry’s performance, as other factors drive solar deployment.
