This week, March 25, the U.S. the Department of Commerce could decide on whether it will take up the anti-dumping and countervailing duty (AD/CVD) petition put forth by Auxin Solar. In a recent interview for our YouTube page, we chatted with MJ Shiao, head of U.S. business development and marketing for LONGi Solar, about the global solar module market as a whole — from the WRO to supply chain issues to sustainable manufacturing. We also asked about the AD/CVD petition.
LONGi is a China-based module company, so its activities in Southeast Asia are part of the petition’s focus (which now cites countries instead of specific companies). LONGi is also the No. 1 global solar PV module supplier. We asked Shiao for his view on the petition’s merits and what might happen to the U.S. solar market if the DOC does take the case. Watch the full 17-min interview below or read the transcript on the AD/CVD below (starting at 5:18 in the video).
Do the petitions have a point?
I don’t think so. At the crux of the petition is really an assertion that southeast Asia cell and module manufacturing facilities are in fact quote minor and insignificant contributions to the creation of a solar module, and I think this is just on the face of it just completely untrue. Those facilities represent hundreds of millions of dollars if not billions of dollars of capital investment; real skilled workforces that are working at those facilities.
It’s just really disappointing to see what is intended to be trade protections being used in a way that ultimately, first of all, is going to be ineffective, and secondly, punishes companies that are truly investing in innovative solar products and supply for the U.S. market.
If the Department of Commerce does agree though, what in your view would be the ramifications in the U.S. solar industry?
The ramifications are fairly dire … simply by taking up the case, they create a ton of risk for anyone that touches the Southeast Asia cell and module supply chain. If Commerce ultimately rules that there is circumvention in this case, any tariffs would be backdated to the date of initiation. So suddenly you create a ton of liability for anyone that is importing modules or cells from those countries.
And the challenge of course is that makes up most the U.S. module supply.
Certainly there are a significant number of Southeast modules, but also when you add in Southeast Asia cell supply to U.S. module assembly factories, you’re talking about somewhere between 75 and 80 percent of domestic solar modules that are used. If you suddenly lock that out or tariff it or just create incredibly uncertain risk, that is going to have the unfortunate side effect of just completely cratering deployments for the U.S. solar industry.
How long would the process play out if they do take the case?
We’re looking really closely at this March 25 deadline that Commerce has to weigh in on whether it initiates or not. … if they do decide to initiate, the process is quite lengthy. Not to take too long on this but that’s when Commerce is going through and looking at these suppliers’ facilities in Southeast Asia and they’re digging through the data, and they’re going to see how much money has been spent on CAPEX, on operating costs, and they’re going to look at the source of that, whether it’s as the petitioner alleged, whether that’s from China or whether it truly is from within the countries or third-party countries. So that’s a huge data problem. That takes a long time to resolve this thing. It will take I think around a year ultimately and so that’s a lot of time to essentially cast a giant shadow of uncertainty over what is critical module supply.
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