Bankrupt PV manufacturer Suniva’s petition with the U.S. International Trade Commission has “created great uncertainty” and puts the future of the U.S. solar market at risk, according to a new analysis from IHS Markit.
Earlier this week, the Solar Energy Industries Association vowed to lead the fight against Suniva’s trade petition, which seeks new import tariffs and minimum import prices on all foreign-made crystalline silicon (c-Si) solar cells and modules, respectively. The national trade group claimed thousands of U.S. solar jobs are at stake.
In a new analysis, Sam Wilkinson, senior research manager of solar and energy storage at IHS Markit, says the petition “poses a severe threat to the deployment of PV in the United States through 2021, as well as to the global PV supply chain.”
“Irrespective of the outcome, the case has the immediate impact that it obscures the outlook for module prices in the U.S., with module suppliers now unable to provide any future price guarantees to clients. Non-U.S. manufacturers of c-Si cells and modules do not know what prices they can offer beyond 2017,” says Wilkinson, adding, “The price uncertainty blocks the contracting process for new PV projects in the U.S., as developers are unable to commit to bid prices.”
Although the outcome of the case “remains highly uncertain,” Wilkinson calls the full implementation of Suniva’s proposed measures the “worst-case scenario.” In that scenario, he says, “IHS Markit estimates that PV demand in the U.S. would shrink by 60 percent for the period 2018-2021 compared to its current forecast, as the market would be constrained by the relatively small amount of manufacturing within its borders.”
Furthermore, he says, “The number of economically attractive state markets for utility-scale PV using c-Si modules in 2018 would likely fall from 43 to 32 markets. This would effectively take the market back to attractiveness levels seen in 2015 and 2016.”
According to Wilkinson, the resultant drop in U.S. PV demand also would “shake up” the global supply chain and “throw the rest of the world into an oversupply situation.”
“Further price declines could accelerate demand in other price-sensitive PV markets or potentially open up emerging markets; however, this additional demand could only partially offset the reduction of demand in the U.S.,” he explains. “A projected slump in the U.S. also could impact future PV policy in China, as the government would seek to protect its industry.”
Meanwhile, Wilkinson says both thin-film PV suppliers and U.S. manufacturers, such as SolarWorld Americas, First Solar, and the Tesla/Panasonic partnership, would actually prosper, as they would not be subject to the proposed trade measures.
“These suppliers would stand to benefit significantly in the U.S. PV market and capture significant market share in their respective segments,” he states. “The lack of competition would also enable these suppliers to capture more margin.”
Complicating matters, though, is the uncertain fate of U.S.-based manufacturer SolarWorld Americas, which operates a large PV manufacturing facility in Hillsboro, Ore. Its German parent company, SolarWorld AG, recently filed for insolvency proceedings in local court. Wilkinson says that if the U.S. subsidiary were to follow its parent into bankruptcy, it “could mean a reduction in the amount of capacity available that would not be subject to the import tariffs.”
Notably, SolarWorld Americas recently stated that it is “operating as usual and maintaining full operations” despite the parent company’s filing.