UFLPA update: Customs released some non-Xinjiang, China polysilicon modules from detention according to industry note

customs clearance

In a recent industry note for investors, ROTH Capital says that its checks indicate more detained solar modules are being released by Customs into the market.

Specifically, Philip Shen, Managing Director, Senior Research Analyst at ROTH, says his checks suggest “Astronergy’s non-Xinjiang, China polysilicon modules were released by CBP during the week of November 13.”

“We believe the polysilicon was from Ordos and Asia Silicon, and it appears that the MGS and quartz were also Chinese sourced, which, in our view, is a first. What does this mean? Look for module supply to the US to be greater, and for this to serve as more downside pressure to US module pricing.”

To Shen, this indicates that other solar modules that incorporated with non-Xinjiang China polysilicon may now have a much clearer path to serve the U.S.

Utility-scale outlook

That could be welcome news to developers and many global module brands — but how might it affect the utility-scale solar outlook for 2024?

Shen also recently surveyed 22 utility scale solar contacts comprising asset owners, developers, and EPCs, and the results suggest “there is more downside risk than upside potential to industry 2024 and 2025 forecasts for US utility scale solar.”

“While many of our industry contacts still expect pricing power ahead to offset the elevated cost of capital, we believe fewer currently see pricing power vs. two months ago, and incrementally there is greater risk around interconnection/transmission challenges, long lead time equipment delays, and labor cost/availability as we get through 2024.

Lower module pricing, lower battery pricing, and the 10-year treasury going lower certainly can help, though we think things could get a bit worse before they get better.

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