l'Actualité du Solaire

The major news this week is US President Biden's decision to lift tariff restrictions on panel imports from South East Asia. This decision is in line with the installer lobby, but it takes away the prospect of rebuilding a panel production industry on US soil.

The extra buying by US installers will be superimposed on the increased Chinese and European demand. Prices will rise sharply in the second half of 2022 and into 2023. There will be no lull in prices.

Summary :

US reopens borders to panels from China's satellite countriesPresident Biden has lifted tariff restrictions on panel imports from South East Asia for two years.

This has big consequences for global supplyThis has major implications for global supply: US purchases will be added to European or Chinese supplementary purchases.

The multiple demands for panels will come up against China's physical production limitsWhether it is silicon or panels, the high demand will put upward pressure on the price of panels

Low Chinese prices do not encourage Europeans or Americans to start producing panelsThey remain dependent on China for 90% of their needs

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The text:

The United States reopens its borders to panels from China's satellite countries

American installers have won. America has lost more than a battle, it has lost the war!

By lifting customs restrictions on imports of panels from Cambodia, Thailand and Vietnam, the American president has given in to the installer lobby, which has pointed to a significant drop in installations in the first quarter. To do this, they cited supply or logistics difficulties (noted by the various American groups, including First Solar and NEXTracker). The latter are obliged to repatriate their production to the United States, as they have difficulty managing shipments), and the reduction in imports linked to the anti-circumvention investigation launched on 28 March: buyers fear a catch-up of customs duties.

To save face and make people believe that there is a quid pro quo, the President has set in motion the National Defence Act. This vague law favours central government purchases of up to 1 GW per year and thus 10 GW over the decade. There is nothing binding; nothing to encourage installers to buy American, let alone increase industrial panel production facilities on US soil!

What is serious is that supply will only come from China and its satellites. What is worrying is that the installers have realised that the President will now give in to any coordinated action by a pressure group. To satisfy them, the president did not understand that Trump's efforts, followed by the not-yet-passed "Buy Back Better" legislation that would stimulate any production of the industry on US soil, were being undone. China remains the only global supplier of panels. It is easier for American installers to source from China than to look for local manufacturers. However, the latter will be subject to exacerbated competition from the Chinese, who have an interest in "cleaning out" the various pockets of resistance constituted by the few American competitors.

This has major consequences for global supply:

American demand will swell a rapidly expanding world demand. In addition to this, there is also demand from Europe, which wants to free itself from Russian gas and rely on solar power plants to compensate for a reduction in hydrocarbon purchases. Europe is forecasting domestic demand of 49 GW in 2022, compared with 26 GW in 2021 and 21 GW in 2020. Thus, Europe would absorb 23 GW more in 2022 than in 2021.

For its part, China has planned to double its photovoltaic installations in 2022, according to the Chinese Energy Administration. It will increase from 55 GW in 2021 to 108 GW in 2022, i.e. an additional 53 GW. The focus is on distributed installations, but large-scale plants have already reached grid parity. As in Europe, there is no longer a need for subsidies to support their expansion. As a result, these large plants are multiplying and the government no longer has any leverage to limit their commissioning.

While China, Europe and the United States are the three major areas of PV expansion, the rest of the world has also discovered that installing solar panels can provide cheap electricity. It is also increasing its needs

The multiple demands for panels will come up against the physical limits of China's production

As a result, demand forecasts for 2022 are 200-280 GW (204-252 GW, according to BloombergNEF) compared to 150-190 GW installed in 2021 (183 GW according to BNEF). Thus an increase of 70 GW (+38%) is expected in 2022 over 2021 and will be absorbed almost single-handedly by Chinese demand. The additional demand between 2021 and 2022 from Europe, the United States and the rest of the world cannot be met except by a considerable increase in the price of panels (which is logical in the western economic world). In the Chinese logic, this is an additional remuneration linked to the dominant position of Chinese production. Thus, there is still talk of a silicon shortage even though Chinese production has increased by 29% in 2021 over 2020, allowing a similar increase in panel production. The intensity of demand in 2022 will create an increase in both silicon and panel prices throughout the second half of 2022 and into 2023.

Low Chinese prices do not encourage Europeans or Americans to enter panel production

The Chinese monopoly of panel supply is not likely to end as the US Congress failed to find a majority for the "buy better back" bill that would have stimulated production and allowed the US to eventually become a major photovoltaic producer again. As for Europe, it discusses, procrastinates and procrastinates, believing that the Chinese will always be there to supply them with panels at low prices, after having believed that Russia would always supply them with gas and oil at a privileged price. It is doing nothing to revive wafer and cell production, which is close to zero (0.5 GW of wafers and 2 GW of cells) for an estimated demand of 49 GW in 2022.

The world has understood that renewable electricity (solar and wind) is the future, but nothing is being done in Europe and the United States to prepare for the future, to recreate a favourable ecosystem for photovoltaics, and to promote the use of solar energy.The world has understood that renewable electricity (solar and wind) is the future, but nothing is being done in Europe and the United States to prepare for the future, to recreate an ecosystem favourable to photovoltaics, to reconstitute an industry with a variety of activities that will enable us to safeguard our economic independence and also our strategic position. The Russian gas crisis has not opened the eyes of our leaders and has not led them to a proactive policy of industrial renaissance in photovoltaics. They prefer to put themselves in the hands of the Chinese who supply 90% of European panels and pay for them.

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