The necessities of measures just like the Uyghur Forced Labor Prevention Act (UFLPA) imply that photo voltaic panel costs within the United States could be twice as excessive as in Europe.
From pv journal 05/24
The previous two years have seen a surge in PV module manufacturing. Clean Energy Associates (CEA) expects a 15% improve in annual photo voltaic manufacturing capability by May 2025, in comparison with an 8% improve in demand.
Many elements contribute to this imbalance. The prospect of further antidumping and countervailing duties (AD/CVDs) from the US authorities, with new international locations doubtlessly affected, additional complicates the image for photo voltaic module patrons.
With an election scheduled within the United States in November 2024, there could also be additional coverage modifications.
Tariff modifications
Developers have loved falling costs for the primary time for some time however the brand new tariffs will elevate costs within the US regardless of plentiful provide.
The largest world photo voltaic module producers have accommodated UFLPA restrictions to ship extra product than anticipated and US module manufacturing is rising. New producers based mostly within the United States and different international locations not affected by AD / CVD – corresponding to Türkiye and Indonesia – will take time to adapt to the brand new commerce coverage, as occurred after the introduction of UFLPA.
Solar builders might have new suppliers and have to redouble high quality assurance and manufacturing facility acceptance testing to make sure high quality.
Technology in transition
The business is within the midst of a transition from passivated emitter rear cell (PERC) to tunnel oxide passivated contact (TOPCon) photo voltaic. Heterojunction (HJT) photo voltaic is altering, even with PERC modules, with new supplies that make the panels extra weather-resistant. Developers have traditionally struggled to buy insurance coverage for tasks in hail-hit areas like Texas. Now, a movie could be utilized to PV module glass throughout manufacturing to stabilize the merchandise. Such technological modifications add extra danger to produce agreements, nevertheless.
Favorable phrases
After a 24-month to 36-month vendor’s market, a renewal can reopen favorable phrases and situations for patrons. When producers maintain the higher hand, builders have a troublesome time persuading them to develop into importers of report, and thus liable for getting merchandise throughout the border by complying with US Customs and Border Protection ( CBP) UFLPA traceability necessities. If the cargo is detained, the importer of report is the accountable get together.
If the client is the importer of report, they might face paying for merchandise caught in customs. If the provider is accountable, cost shouldn’t be made till the panels are within the nation.
The purchaser can combine a Delay Liquidated Damages clause into the availability contract to keep away from such a situation. If a cargo is delayed as a result of it doesn’t go CBP necessities on the border, the vendor should compensate the client for the extra prices incurred.
Developers have to ask themselves, “If I resolve to lock within the worth, will these modules sit in warehouses for a very long time?” That’s one of many downsides of pre-planning and shopping for at a cheaper price. When a undertaking is delayed, modules sit in warehouses the place they are often repeatedly moved by forklifts, doubtlessly inflicting harm. Developers can negotiate phrases to restrict the chance related to long-term storage, nevertheless.
There can also be the chance of the know-how changing into outdated. Developers have realized the laborious approach previously that after they save a whole lot of gear – transformers and modules – typically it seems that tasks are canceled or delayed sufficient for know-how to evolve and their product turns into out of date. As a end result, builders should resell the gear at a fraction of the worth they paid for it.
Regulatory uncertainty
Policy uncertainty presents one other problem. What will occur within the upcoming US presidential election and the way will it have an effect on photo voltaic gear provide and manufacturing ranges? Developers should plan for uncertainty in addition to take into consideration maintaining their tasks on schedule.
The present surge in provide has occurred in a brief time frame attributable to tax credit score incentives included within the US Inflation Reduction Act (IRA) and since producers are constructing amenities inside the United States to keep away from import restrictions. – import.
The undertaking growth and building worlds are at present not shifting as quick as photo voltaic manufacturing and manufacturing. Although challenges have come on the event aspect – tasks have been delayed, finance has fallen, and planning regimes have modified – producers are shifting ahead at full velocity.
The dynamics of Europe versus the United States are very totally different in the present day due to the UFLPA. There continues to be no comparable restriction in place in Europe, so the continental market is stuffed with low-cost modules. The pricing setting is altering. Prices in Europe have dropped to $0.11/W of panel manufacturing capability. Prices within the United States are nonetheless hovering round $0.24/W.
That worth distinction is maintained as a result of many panel makers are nonetheless unable to export to the United States, as they’re nonetheless attempting to determine the UFLPA import course of. The business has mainly constructed a separate provide chain in North America.
Products could run by the identical amenities however suppliers fastidiously separate those who require full monitoring to get to the United States. Many modules sitting in European warehouses lack the total traceability required for importation to the United States.
The views and opinions expressed on this article are these of the creator, and don’t essentially replicate these held by pv journal.
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