Analysis group Wooden Mackenzie has launched an up to date U.S. photo voltaic forecast after the Biden Administration issued an Govt Order (EO) saying a two-year delay on AD/CVD tariffs by the Dept. of Commerce. WoodMac had been predicting a 6.3-GW discount in 2022 installations primarily based on the uncertainty across the anticircumvention investigation launched by the DOC in March. Whereas the two-year pause on tariffs is predicted to convey some reduction to the photo voltaic trade, WoodMac stated the influence will differ throughout all segments.
Most (round 85%) US utility-scale tasks depend on imported modules from the 4 named international locations within the anticircumvention investigation. When the investigation began, module producers closely decreased manufacturing in Southeast Asia, as most of their provide is directed to america. The EO led some main producers to restart that manufacturing.
Some suppliers anticipate to ship modules to america as early as the tip of Q3. Whereas the EO has introduced some certainty to the query of latest AD/CVD tariffs, the trade now faces uncertainty across the implementation of the Uyghur Pressured Labor Safety Act (UFLPA). Enforcement of this new regulation may severely constrain module imports to america.
On the demand aspect, builders have expressed that tax fairness traders nonetheless view the potential tariff implementation as a danger – regardless of the two-year pause. Since photo voltaic challenge financing will nonetheless be thought of high-risk till the DOC publicizes a last dedication, builders will proceed to see excessive prices of capital and excessive limitations to entry, WoodMac stated.
The impact of the investigation was exponential. Weeks of inactivity have resulted in months of delays. EPC companies have already began reallocating equipment and personnel to non-energy tasks, leading to exacerbated labor shortages for near-term tasks. Since a excessive quantity of tasks has already been pushed to 2023 or later, there’s a low likelihood that many shall be renegotiated to 2022. Contemplating potential module availability and contract renegotiations, WoodMac estimates 30 to 40% of the capability delayed to 2023 and 2024 will materialize sooner.
All these components thought of, WoodMac expects a modest upside of 1.5 GW (17%) to utility-scale photo voltaic in 2022, however larger upside potential of three GW (18%) in 2023.
Much like utility-scale photo voltaic, most industrial photo voltaic module provide (about 80%) comes from the 4 Southeast Asian international locations topic to the AD/CVD investigation. The EO will assist builders safe modules all through the remainder of the yr. A few of these modules may make it into tasks in 2022, nevertheless it’s extra possible that these shipped throughout the the rest of the yr shall be a part of tasks coming on-line in 2023.
Because of this, WoodMac predicts some modest upside in 2022 (roughly 100 MW) and extra upside to installations in 2023 (round 500 MW), as delayed tasks come on-line.
The most important influence of the EO on residential photo voltaic shall be in modifications to the aggressive panorama. Previous to the EO, WoodMac predicted that smaller native installers with out established gear vendor relationships would discover it troublesome to get gear throughout the AD/CVD investigation uncertainty. Demand from these installers could be fulfilled by bigger installers. Since residential photo voltaic demand continues to be sturdy, WoodMac anticipated solely very minor impacts from the investigation, which might be greater than outweighed by latest delays to California’s internet vitality metering (NEM) 3.0 continuing.
Subsequently, the EO doesn’t change WoodMac’s view on residential photo voltaic installations. But it surely does imply that smaller native installers ought to fare higher within the subsequent few months.
News item from Sylvia Leyva Martinez, senior analyst, North America utility-scale photo voltaic; and Michelle Davis, principal analyst, photo voltaic; of Wooden Mackenzie