The US Department of Commerce’s anti-circumvention probe has essentially shut down US procurement of PV modules, and the government is expected to take its full allotment of 150 days to make a ruling, says Philip Shen, managing director of ROTH Capital Partners.

From pv magazine USA

The US Department of Commerce (DoC) has launched an antidumping and anticircumvention investigation in four Southeast Asian countries that supply 80% of the nation’s solar panels.

If violations are found, a 50% to 250% tariff can be placed on solar panels entering the United States. Module prices can represent 50% or more of a project’s cost, so for a $300 million utility-scale project, that’s as much as $375 million in risk. What’s more, the fee is retroactive to the February 8th petition by Auxin Solar led DoC to launch the investigation.

The Solar Energy Industries Association (SEIA) reports that roughly 75% of companies report canceled or delayed module supply, 50% said that 80% or more of their 2022 project pipelines are at risk.

In his industry note, Philip Shen, managing director, ROTH Capital Partners, wrote that “the module procurement process has been turned upside down.” He continued to share that some solar developers may be willing to take on the risk and continue to procure and deploy, but that activity will mostly occur in the distributed generation space rather than the utility-scale. “Our AntiCirc checks this week suggest C-Si utility scale module volume for the rest of the year may largely shut off,” said the note.

Shen’s team believes the DoC will take the full 150 days it is allotted to make a determination on the case, which places the deadline on Aug. 26. He notes that the passing of Senator Jon Ossoff’s (D-Georgia) Solar Energy Manufacturing for America Act may play a role in the determination.

The note added that mid-week, facilities in Vietnam, Malaysia, and Cambodia had started to reduce production. Shen’s team also noted an increase in power purchase agreement prices and a trend of smaller developers reselling projects to larger developers.

Costs are particularly rising in the distributed generation space, with pricing skyrocketing to $0.607/W to $0.70/W, rising from last year’s $0.40/W to $0.50/W/ This translates to residential end-user costs rising from $4/W to $4.50/W to nearly $6/W, said ROTH.

“American workers will bear the pain of the decision to allow one rogue antagonist (Auxin Solar) to abuse and manipulate trade laws for their own gain,” American Clean Power Association CEO Heather Zichal said in reaction to the investigation. “The 230,000 proud Americans who work in the solar industry are calling on President Biden and Secretary Raimondo to reverse their decision and bring this matter to a speedy conclusion. Every day this investigation hangs over the solar community is a day of lost jobs and postponed solar projects critical to the administration’s climate agenda.”