ANALYSIS: Discussions with at least one growing solar developer reveal panel shortages, asterisks and other potential clouds on solar’s horizon because of the Section 201 trade case.
I had long had Nov. 13 circled on my calendar. That’s the day when the U.S. International Trade Commission (ITC) is scheduled to deliver its recommendations on the Suniva (+ SolarWorld)’s Section 201 trade case to President Donald J. Trump (the potentially terrifying implications of which I wrote about yesterday).
Little did I know, however, that the effects of the case are already being felt, and at a meeting with some fellow Midwesterners, I as informed that developers around the country are already feeling the crunch.
“It’s hard to bid on projects right now because of the uncertainty of what module prices will be for next year,” said Jefferson Gerwig, purchasing manager for Indiana-based developer Inovateus Solar. “We’ve seen a lot of people at [Intersolar North America] who have these projects they are ready to develop. Any deal signed here, though, has to come with a big asterisk, saying ‘these prices are subject to change depending on the Section 201 trade case.'”
At which point Adam Raifsnider, an account executive for the company, interjected.
“There’s already a shortage of modules,” Raifsnider said, as Gerwig nodded in agreement. “We don’t usually see an exhaustion of inventories until October or November. This year, those shortages are already happening – and it started last month.”
Developers are trying to snatch up as many modules as possible because of abject fear at what could happen if Suniva is granted relief under its petition, Gerwig said. Adding to the shortage is the fact that the Chinese and Indian markets are still growing fast. So manufacturers are selling any excess inventory into those markets – markets where they can have a reasonable expectation of continued growth moving forward.
“The uncertainty we’re seeing in the U.S. market is not good,” Gerwig said. “It’s putting a real damper on a lot of development, and the market will continue to worry until the case is finally decided – and even then, with no certain outcome, the effects could linger.”
On the other side of the case, Vietnamese-based module manufacturer Boviet Solar met a question about the trade case with little more than a shrug.
“It isn’t going to hurt module companies,” said John Bereckis, president of Boviet Solar USA’s Module Division. “All of us have contingency plans to deal with the fallout, no matter how the case comes out.”
Bereckis said module manufacturers have several options, including building factories in countries not affected by the tariffs to partnering with U.S. companies to build them in country.
“The only companies that will be hurt by harsh sanctions will be U.S. manufacturers themselves,” Bereckis said. “The market will shrink, and the downstream installers and other manufacturers will be hurt.”
“Meanwhile, the international companies will find ways to manufacture modules at prices that are affordable but will include the price of the new tariffs,” he added. “So we’ll have more money to invest in research-and-development, and we’ll be able to expand our lead in creating breakthrough technologies.”
Most of the conversations I’ve had at the show so far have revolved around the Suniva case, but they’ve largely been in the abstract – what might happen, what could happen. But today’s conversations with Inovateus and Boviet were immensely sobering. It’s clear the “Suniva effect” is real – and people are already feeling its effects and planning for the future.