On Valentine’s Day, the United States International Trade Commission (USITC) determined an affirmative indication regarding injury to the US industry as part of the new anti-dumping (AD) and counterveiling duty (CVD) petitions against PV products from China and Taiwan. The US Department of Commerce (DOC) will continue investigations, with determinations scheduled over the next few months.

So, what are the possible consequences of these investigations, and are there likely to be any winners once things are decided?

Firstly, the landscape for PV module supply to the US solar PV market during 2013 suggests that SolarWorld would not be the largest winner, if AD/CVD tariffs were to impact on the level of imports of Chinese modules using Taiwanese cells to the U.S. According to our research, First Solar and SunPower ranked first and third, respectively, for MW module shipment volumes to the US market during 2013.

2013 PV module market share to the U.S.

Source: NPD Solarbuzz Module Tracker Quarterly

This raises the question of why First Solar, SunPower, or other leading U.S. solar companies have not filed for similar petitions. This main reason is that, while they are generally regarded as being leading U.S. brands, most of them produce outside of the U.S. (mostly in Southeast Asia). In fact, the scale of PV cell and module manufacturing inside the U.S. is quite small compared to the rapidly growing end-market demand within the country.

Therefore, during 2013, the shortfall (due to lack of domestic supply) had to be served by imports, especially c-Si module imports from China.

As the figure shows, six of the top 10 PV module suppliers to the U.S. PV market in 2013 were Chinese, led by Yingli Green Energy and Trina Solar. Overall, about half of all PV module demand in the US was met by Chinese modules in 2013.

The vast majority of Chinese c-Si modules shipped to the U.S. in 2013 incorporated c-Si cells made in Taiwan (since using cells made in China would have been assessed high AD/CVD tariffs set in 2012). Leading Taiwanese cell suppliers – such as Motech, Neo Solar Power, and Gintech – were typically the PV cell makers used within the module brands shown in Figure 1. There was also a relatively small amount of direct sales of c-Si cells and modules by Taiwanese manufacturers to the U.S.

So, what will happen if determinations of the new AD/CVD investigations further increase the barrier to c-Si PV imports from China and Taiwan?

Depending on tariff levels, Chinese and Taiwanese suppliers may have to increase prices, relocate production, or even quit the U.S. market. But the net effect for downstream players in the U.S. (in each of these scenarios) would be higher module costs and lower investment returns. So, it seems that everyone in the PV value-chain loses.

When President Obama proudly announced that “we’re becoming a global leader in solar” in his State of the Union speech, he was referring to “every panel pounded into place by a worker whose job can’t be outsourced,” but he didn’t mention the production of these panels.

Solar PV installed system prices are coming down in every country, and this remains a common theme to celebrate from politicians to PV research institutes, and across installers and end-users. It is declining system prices that are the key to increasing the number of workers doing that ‘panel pounding’ on rooftops or scaling up those solar farms.

However, any country that imposes costs on – or restricts – the supply of PV modules is going to be at an immediate disadvantage if there is insufficient supply to meet the needs of its domestic market.

Even after the U.S. industry spent many billions (much of this backed by government incentives) to create a domestic solar PV manufacturing capability to meet domestic demand, it was First Solar and SunPower (who maintained offshore manufacturing) that triumphed over companies such as Solyndra and Abound Solar.

In an industry that knows incentives will eventually vanish, solar PV system and module prices have to keep going down. If the U.S. government reacts to the voices from domestic downstream sector (such as SolarCity and SunEdison), there may be fewer losers and more winners going forward.