By MA Yueran
Trina Solar is to invest US$200 million (1.5 billion yuan) in a photovoltaic (PV) production facility in Texas, the United States. The plant will produce 5GW of modules every year, with production expected to commence in 2024.
Other PV manufacturers also have plans to establish works in the U.S. as demand for clean energy rises. The U.S. has a current PV production capacity of approximately 6 GW, with planned capacity exceeding 30 GW.
Barriers rising
Chinese PV companies have a significant share of the American market. So much so that Washington is contemplating even more protectionist measures to support domestic manufacturers.
The U.S. first imposed tariffs on Chinese PV products in 2012. In 2018, President Trump announced a 30-percent tariff on imported PV products, and began extension of Section 301 tariffs.
Even as Chinese companies moved manufacturing to Southeast Asia to avoid high tariff rates, the U.S. announced in 2021 that it would impose tariffs on products originating from Southeast Asia.
Subsidies for all, for now
In 2022, the US government enacted the "Inflation Reduction Act" (IRA), which includes subsidies for domestic PV manufacturers.
Due to trade barriers and import and export restrictions, the price of PV modules in the US is about 10 cents per watt higher than on the international market. This higher selling price, coupled with generous subsidies, makes PV making in the U.S. an attractive proposition.
In the financial results of Chinese PV companies, trade barriers and trade friction are often cited as major industry risks. Establishing production facilities in the US not only promises to lower the cost of exporting to the US but also allows companies to benefit from substantial subsidies offered by the IRA.
Gateway to the Middle East
In recent years, Saudi Arabia has also become a popular choice for domestic PV manufacturers seeking international expansion.
In May, leading PV material provider TZE announced a joint venture with Saudi company Vision Industries to build a solar-grade silicon factory in Saudi Arabia, with products primarily targeted for sale in the Middle East and Africa.
Another major PV materials provider Golden Concord is also considering establishing a factory in Saudi Arabia.
As global trade barriers intensify, the PV industry will become decentralized, and global operations will be key to commercial success.
