US efforts to boost domestic production of solar panels by imposing anti-dumping tariffs on Chinese ones have failed completely.
While the tariffs did cut direct supplies from China, they failed to reduce the overall US dependence on imports, Rystad Energy said in a report. In 2021, he should reach a new record. In particular, America will import solar panels with a total capacity of 27.8 GW by the New Year against 26.7 GW last year.
If recent import trends continue, PV module imports this year will total $ 8.9 billion. In 2020, it amounted to $ 8.7 billion.
It is worth noting that in 2008, 22% of all PV modules imported to the United States were of Chinese origin. A year later, Chinese PV cell manufacturers deployed a new business strategy with aggressively low margins. It has enabled them to surpass their peers and dominate the US market. As a result, by 2011, the share of Chinese imports of photovoltaic modules increased to 57%. Tariffs for Chinese modules, introduced by the US in 2012, have led to a rapid decline in the market share of Chinese manufacturers, which is now estimated to be less than 1% by 2021.
However, the goal of stimulating domestic production capacity was not achieved. The US has instead filled the supply vacuum with panels from other Asian countries. US-produced PV modules are expected to reach 5.2 GW in 2021, up from 27.8 GW of imported panels.
As the U.S. solar industry has expanded in recent years, the U.S. government has sought to protect its domestic solar PV capacity. Primarily due to the introduction of tariffs on imports from China. However, this punitive policy did little to boost domestic production.
“Instead, it increases the cost of the panels and moves the country of origin of the batteries from China to other countries in Asia – Malaysia, Vietnam, Thailand and South Korea. Policymakers should rethink their strategies for the US to enter the global PV market and meet domestic demand. Moving forward could be the emulation of the tax break schemes that have played an important role in the deployment of solar and wind capacity in the country, ”said Marcelo Ortega, a renewable energy analyst at Rystad Energy.
It is especially worth noting that although the imported modules come from Southeast Asia, the manufacturers are usually Chinese enterprises. They just moved the assembly phase, the final step in PV module production, to other countries. The US has made some attempts to counter these strategies of Chinese companies, but these attempts have so far failed.