The world’s largest solar company warned that stricter US import requirements for panel shipments will continue to create disruptions to the American market through next year.
(Bloomberg) — The world’s largest solar company warned that stricter US import requirements for panel shipments will continue to create disruptions to the American market through next year.
Longi Green Energy Technology Co. projects between 20 to 50 gigawatts of US solar market demand in 2023, the Chinese company said in an earnings briefing Monday, according to a note by Daiwa Capital Markets. Longi indicated the wide range reflects uncertainty caused by the US import restrictions.
A massive amount of solar panels has been held at the US border under a ban targeting alleged human-rights abuses in China’s Xinjiang region that went into effect in June. The Chinese government has repeatedly denied allegations of forced labor in Xinjiang.
Under the ban, US Customs and Border Protection requires documentation from importers detailing the source of quartzite, a raw material used in the manufacture of solar panels, to prove their supply chains are free of links to Xinjiang.
Longi said no solar companies are likely to fulfill the strict requirements, according to the Daiwa note. The shipping disruptions have already led to significant project delays in the US, Morgan Stanley analysts said last month.
The US Solar Energy Industries Association forecast the country will install 15.7 gigawatts of solar energy in 2022, the lowest in three years as a result of the detention of modules.
Some companies have found a way to get through the checks, however. JA Solar Technology Co. was able to clear customs as it sourced polysilicon from outside China while manufacturing of wafers, cells and modules took place in Vietnam, according to Daiwa. The company expects to ship 3 to 4 gigawatts of solar modules in 2023.
Outside the US, solar demand remains strong, led by China and Europe. That growth has driven up the price of polysilicon, providing stellar profits for makers of the key solar material. But that earnings pace will fade as supply and demand reach a balance in the second half of 2023, Tongwei Co., the world’s largest producer of the material, said on Monday, according to Daiwa.
Profit will flow to downstream companies such as manufacturers of cells and modules, which will be in tight supply next year, while wafer producers are likely to see low prices due to abundant amounts, Tongwei said.
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