Solar panel shipments set a record in 2022 but uncertainty over tariffs loom in the future
Energize Weekly, September 6, 2023
Solar photovoltaic panel shipments in the U.S. rose 10 percent in 2022 year-over-year, setting an annual record of 31.7 million peak kilowatt-hours of modules, with 88 percent of the capacity coming as imports, according to the federal Energy Information Administration (EIA).
The future for imports, however, has been thrown into uncertainty by the U.S. Department of Commerce’s August ruling that solar cells and modules completed in Cambodia, Thailand, Malaysia, and Vietnam using parts and components manufactured in China are circumventing U.S. trade duties against China.
Those four Southeast Asia countries accounted for three-quarters of the imports between January and November of 2022 and even the opening of the Commerce Department’s investigation in April roiled the market, according the BloombergNEF (BNEF).
“The move chilled the U.S. solar market, which has relied heavily on equipment assembled in those four southeast Asian nations in recent years,” BNEF said. “However, in June 2022 the White House effectively suspended imposition of such tariffs for at least two years. Imports then surged.”
Since 2018, solar module imports from China have faced tariffs. Sending components for assembly in Southeast Asia was seen as a way of getting around those levies.
The Department of Commerce investigation was initiated by a complaint from San Jose, California-based Auxin Solar, a small domestic solar panel maker.
The Department Commerce ruling could lead to tariffs that would make the Southeast Asian panels and cells more expensive, but not until June 2024 when a tariff waiver issued by the Biden administration expires.
“The U.S. Department of Commerce is out of step with the administration’s clean energy goals, and we fundamentally disagree with their decision,” Abagail Ross Hopper, president of the Solar Energy Industries Association, a trade group, said in a statement.
“Auxin Solar’s allegations of circumvention were meritless from the beginning and the inquiries have caused uncertainty in the U.S. market at a time when solar energy is on the rise.”
In 2022, 10.9 gigawatts (GW) of new utility-scale solar capacity were added in the U.S., the second-largest addition in a single year after the record-setting 13.5 GW added in 2021, the EIA said. The country also added 6.4 GW of new small-scale solar capacity in 2022, an annual record and 17 percent more than was added in 2021.
The total value of solar module shipments in 2022 was $12.5 billion, the EIA said.
“Over the past decade, U.S. solar capacity has boomed, which includes both utility-scale solar farms (with one megawatt of capacity or more) and small-scale solar,” the EIA said. “The majority of small-scale solar is residential rooftop solar installations.”
Some of the projects slated for 2022 were canceled or delayed until 2023 due to solar panel supply-chain problems. This included solar panel shipments stopped at the U.S. border as federal customs officials began enforcing the Uyghur Forced Labor Prevention Act.
The act prohibits imports of goods made with force labor from China’s Xinjiang province, which is the source of almost half the world’s polysilicon production. At one point, a total of 1 GW of panels were held up at the border pending documentation that they did not violate the act.
Five states were the destination for 40 percent of all the solar panel capacity, led by California with more than 4.4 million peak kilowatts, Texas with 2.5 million peak kilowatts and Florida with more than 2.4 million peak kilowatts. South Carolina and New Jersey completed the top five.
