(Yicai) July 4 — Southeast Asia will no longer be a safe haven for Chinese photovoltaic companies because the United States is about to introduce new tariffs on imports of solar cells and modules from the region. Therefore, Chinese firms are forced to seek new destinations for their overseas expansion plans.
After a thorough investigation into imports of crystalline silicon PV cells, whether or not assembled into modules, from Cambodia, Malaysia, Thailand, and Vietnam, the US International Trade Commission concluded that there is a reasonable indication that such products are sold at less than fair value in the US because they are subsidized by local governments.
Therefore, the USITC will unveil preliminary countervailing duties on solar cells and modules from the above SE Asian countries by July 18 and related antidumping duties by Oct. 1.
It is cheaper for Chinese PV companies to build factories in SE Asia, Zhao Yi, a solar industry analyst at InfoLink Consulting, told Yicai. These plants used to export products to the US and other overseas regions, he added.
Uncertainties in investing in PV projects in SE Asia are rising because of the USITC investigations, which will likely involve more countries in the region soon, Zhao believes.
“Many Chinese firms have already started building plants in the US in the past two years to avoid trade frictions and enjoy local government incentives,” Zhao noted. “But there are also risks, such as adapting to local policies, regulations, and business environment, bearing high construction costs, and applying for related patents.”
“Industry leaders have given up plans for SE Asia and started building plants in Mexico and the US,” a senior PV industry expert told Yicai. However, the Chinese solar companies that recently built plants in Cambodia, Malaysia, Thailand, and Vietnam have not yet recovered the costs, so their best choice in the short term may be moving to neighboring countries that have not yet been affected by the US investigations, such as Laos, Myanmar, or Indonesia, the expert added.
Trina Solar will adjust the production plans of its factories in Thailand and Vietnam in accordance with the demand from its US clients, the Chinese solar module giant told Yicai, adding that the plants it is building in the US and Indonesia were not affected by the USITC investigations. The factory in the US is expected to come on stream this year.
Meanwhile, the 5-gigawatt PV module joint venture plant in Ohio of Chinese solar giant Longi Green Energy Technology came on stream in the first quarter.
The Middle East is another emerging destination for Chinese PV companies, as the local demand for solar power stations is rapidly rising. The Middle East’s demand for PV installations was between 23.6 GW and 20.5 GW last year and will likely reach 29 GW to 35 GW in 2027, according to InfoLink Consulting data.
Trina announced last October that it would build a large-scale production base to make products along the solar industry supply chain, such as high-purity silicon materials, silicon wafers, and battery modules in the United Arab Emirates.
TCL Zhonghuan Renewable Energy Technology, the world’s second-largest supplier of monocrystalline silicon wafers, announced in May last year that it would build a silicon wafer factory with an annual output of 20 GW in Saudi Arabia.
Last month, Drinda New Energy Technology unveiled plans to invest USD700 million in a high-efficiency PV cell plant with an annual production capacity of 10 GW in Oman.
Some other solar companies are mulling building factories in Europe. It is still very risky to build plants in Indonesia, Laos, or the Middle East, so Aiko Solar Energy will give preference to Europe if the opportunity presents itself, especially with the latest subsidy policies, Chairman Chen Gang told Yicai.
Diversified investment has become a trend for major Chinese PV companies to address trade frictions. Jinko Solar has three overseas factories in Malaysia, Vietnam, and the US, Vice President Qian Jing told Yicai, adding that the US plant has already started production.
Editors: Tang Shihua, Futura Costaglione
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