As the two-year U.S. tariff holiday on solar panels from Southeast Asia concludes on Thursday, American solar project developers face a tight deadline to utilize their duty-free stockpiles by the end of the year, according to a Reuters report.
This development is poised to trigger a surge in U.S. solar installations, which are already experiencing rapid growth. However, it could also frustrate the burgeoning domestic manufacturing sector, eager for developers to adopt American-made equipment.
SEIA forecasts that solar installations in the U.S. will double to 10 million by 2030 and triple to 15 million by 2034. The United States exceeded five million solar installations in May, 2024.
During the tariff moratorium, U.S. solar developers accumulated approximately 35 gigawatts (GW) of imported panels in warehouses. This stockpile is nearly equivalent to the total solar capacity projected for installation across the U.S. in 2024, as per data from energy advisory firm Clean Energy Associates.
The majority of these panels are believed to originate from Malaysia, Thailand, Cambodia, and Vietnam. With the tariffs reinstated on June 6, companies now have 180 days to deploy their Southeast Asian inventory or face new tariffs.
According to research firm Wood Mackenzie, the urgency to use these panels has already spurred a significant increase in solar project construction. Utility-scale installations jumped by 135 percent to 9.8 GW in the first quarter alone.
Stacy Ettinger, senior vice president of supply chain and trade for the Solar Energy Industries Association (SEIA), commented, “The temporary tariff moratorium ensured a sufficient supply of solar modules to support the need for increased clean energy deployment.”
Conversely, U.S. solar manufacturers, seeking new tariffs on Southeast Asian imports, argue that the moratorium has led to an inventory glut. Tim Brightbill, a trade attorney with Wiley Rein, noted, “The tariff moratorium led to this surge and glut of inventories that we’re seeing today, which has also contributed to the 50 percent price collapse in the market that is harming the U.S. industry.”
The oversupply of panels marks a reversal for the U.S. solar sector, which faced severe supply constraints until last year due to the pandemic and concerns about forced labor in the solar supply chain. Solar imports surged at the start of 2023, increasing by nearly 14 percent in the first quarter, with 88 percent of these imports coming from the targeted Southeast Asian countries, according to S&P Global Market Intelligence.
The tariffs aim to target imports by companies evading U.S. duties on Chinese goods by completing panel production in the four Southeast Asian nations. The White House announced last month its commitment to enforcing the 180-day deadline to prevent further stockpiling.
The SEIA has opposed the circumvention tariffs, arguing that they would elevate project costs and hinder the nation’s efforts to combat climate change.
GreentechLead.com News Desk