A new report by IHS Markit estimates that Suniva’s Section 201 trade complaint could slash U.S. PV demand 60% over the next three years.
As pv magazine reported, the bankrupt module manufacturer filed a petition to protect it from foreign competition under Sections 201 and 202 of the Trade Act of 1974. Suniva says the competition drove them to Chapter 11.
The complaint has been roundly criticized by the Solar Energy Industries Association and SolarWorld Americas (which filed previous trade charges against Chinese and Taiwanese module manufacturers). The IHS report, however, is the first evidence of the potentially dire effects it could have on the overall industry.
IHS maintains that 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. It says “non-U.S. manufacturers of c-Si cells and modules do not know what prices they can offer beyond 2017″ and ” thin film manufacturers will be tuning their prices to reflect the potentially higher demand for their products.”
“Suniva’s petition to the International Trade Commission under section 201 has created great uncertainty among investors, installers and suppliers,” writes Sam Wilkinson, senior research manager for solar and energy storage at IHS. “The price uncertainty blocks the contracting process for new PV projects in the United States as developers are unable to commit to bid prices.”
IHS also worries about a potential module oversupply if the Suniva complaint succeeds. While steeper price declines could increase demand in other price sensitive PV markets or potentially open up emerging markets, this uptick in demand could never replace a market the size of the United States.
Other manufacturers are also nervously looking at how the potential slump could affect Chinese government policy. The Chinese government has consistently protected its domestic solar manufacturers.
The bankruptcy of SolarWorld in Germany, along with its German subsidiaries, complicates matters further, IHS predicts. Solarworld adds further complexity to this situation. At the moment, SolarWorld Americas, which holds a significant portion of the available cell and module capacity in the United States, remains unscathed by its parent company's financial woes.
If the tide should shift and SolarWorld Americas is affected by the financial troubles of its sponsor, it could reduce the capacity of modules available to U.S. developers that aren't subject to the import tariffs it helped the United States impose on Chinese module manufacturers. It could also make SolarWorld Americas a potential acquisition target for a company looking to add a U.S. subsidiary.
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Global subsidies and tariffs end up changing overtime disrupting entire renewables industry. Since oil is major beneficiary they may be happy to see this mess. But long term the war between consumers and investors needs some moderation perhaps in the form of national priorities that align across all trading partners. Imo.