OPIS Insights

Watch: Barron’s Senior Energy Writer Laura Sanicola and OPIS Senior Editor of US Solar Colt Shaw discuss what’s ahead for energy this week.

Watch this week’s episode for insights into the state of the U.S. solar market, especially the recent Commerce Department updates on anti-dumping and countervailing duty tariffs affecting solar imports from Laos, Indonesia, and India and how these tariffs will impact US solar importers.

Transcript:

LAURA SANICOLA: Hi everyone. This is Laura Sanicola, author of Barron’s Energy Insider. And I’m here today with Colt Shaw, Senior Editor for US Solar at OPIS. Colt, thanks for joining me.

COLT SHAW: Hey Laura, happy to be back.

SANICOLA: Yeah, happy to have you back. And so last week, the Commerce Department had an update on those anti-dumping and countervailing duty tariffs that you’ve been intermittently telling us about for the past year. So just give us a lay of the land, what went down?

SHAW: Yeah. Yeah. Well, it’s a long tedious process that was delayed by the government shutdown in the fall for a little bit and then the blizzard last week, a couple extra days on top of that. But finally, we have countervailing duties, tariffs, preliminary determination on Laos, Indonesia, and India. Basically, these these tariffs are meant to counteract what they see as unfair subsidies by, specifically, the Chinese government to producers that have moved their factories to these countries. So the subsidy rate, in the meantime, will be basically while the investigation continues, the subsidy rate will work as the cash deposit rate for tariffs.

And now they’re looking at anti dumping rates coming sometime in April. That basically is a tariff meant to counteract dumping behavior or selling a product at less than fair value into a market.

Once those rates come out, they’ll be added together, and those will be the cash deposit rates for imports from those countries until everything’s finalized sometime in the fall, I believe October.

SANICOLA: So the takeaway I’m getting, Colt, is that, the US importers of solar cells and modules from these regions, they’re gonna have to pay more. This is kind of expected and that’s one of the reasons why First Solar, which has US manufacturing, had been benefiting for a while. Notably though after their earnings last week, shares were down very sharply more than thirty five percent as, you know, bookings were not as strong and they just didn’t have a lot of visibility into utility scale growth in some markets, not what the street particularly wanted.

But obviously, AVCVD ruling, this is good for them. So I guess what’s the environment they’re seeing on the ground?

SHAW: Yeah. So I mean, are exposed to AVCVD. They have some factories in Southeast Asia, but not nearly to the extent of all of their kind of crystalline silicon PV competitors. So honestly, the way they’re looking at it right now is there’s a number of policy fronts that redound to their benefit at the moment. The ADCVD to start, CEO Mark Whitmer on their call, he had commended the new CBD rates and said he hopes that they’re going to help to level the playing field for domestic manufacturers. He also commented on recent interim guidance on new foreign entity of concern restrictions published by Treasury earlier this month or last month.

And he he basically said he although the the guidance tended to focus on how to calculate your material assistance ratio, he basically is looking at the language and saying it suggests that the finalized guidance, which is expected sometime this year, we’re not we’re not sure exactly when, We’ll address what he called gamesmanship by Chinese companies related to how they kind of structure their business to maintain tax credit eligibility.

Beyond that, he also pointed to the Oxon Solar case where the US government just dropped their appeal. So if that goes through, which is increasingly likely now without the US government support, it’s just solar module manufacturers and trade groups that are carrying this appeal forward. If they fail in this, basically, are fifty plus billion dollars in retroactive tariffs.

And they basically look at this as it’s going to be kind of a penalty for people that relied on this moratorium and relied on domestic or I’m sorry, imported modules rather than buying, say, first solar modules. And beyond that, there’s also a section two thirty two probe, which is into all imported polysilicon, which would be a huge benefit to them if they come out as strict as some people think it might. They’re one of the few companies. They make a thin-film module, which is proprietary. It doesn’t involve polysilicon at all. So they would be one of the few players that could kind of squeak past this very, very broad umbrella of a tariff that’s expected sometime this year. So they have reason to think that they’re in a good position even despite some temporary shakeups, but it’s all going to come down to exactly the details that are published in each of these cases.

SANICOLA: Alright. So some bumpy times ahead for solar. Thanks so much, Colt, for bringing this down and thanks everyone for joining us. We’ll see you next week.