The demand for modules in the US photovoltaic industry has surged

     A survey shows that the installed capacity of photovoltaic systems in the US photovoltaic industry in 2022 has decreased

compared to the previous year (except for household photovoltaic systems), due to difficulties for photovoltaic developers to

cope with the impact of various policies and ongoing disruptions in the global supply chain. Industry experts say that the US

photovoltaic industry will continue to be plagued by trade barriers and supply chain uncertainty in 2023, but they are optimistic

that the industry will benefit from the Inflation Reduction Act.

     It is expected that the tax credits provided by the "Inflation Reduction Act" will stimulate the development of the US

photovoltaic manufacturing industry, as the industry is preparing for President Biden's executive order expiring in June 2024,

which will suspend the new tariffs arising from the two-year investigation of imported photovoltaic modules by the US

Department of Commerce.

     The US Department of Commerce announced on December 2, 2022, that it will investigate whether photovoltaic modules

imported from four Southeast Asian countries have evaded tariffs and make a preliminary ruling. This statement is a blow to the

development of the US photovoltaic industry, as uncertainty in the supply of photovoltaic modules has led to the cancellation of

some photovoltaic projects planned for installation in 2022.

     The so-called Forced Labor Prevention Act (UFLPA) issued by the United States has also affected the procurement of

photovoltaic modules. According to a Reuters report in November last year, a record request indicated that the US Customs and

Border Protection detained 1053 batches of imported photovoltaic modules between June 21 (the date the law came into effect)

and October 25 last year.

     Sylvia Leyva Martinez, Senior Analyst at Wood Mackenzie, a research firm, stated that the development prospects of the US

photovoltaic industry in 2023 will largely depend on the total shipment of photovoltaic modules released this year. However, the

lack of transparency has made this prediction difficult for the company.

     Martinez pointed out that according to media reports, some detained imported photovoltaic modules may be released, but

he said it is difficult to obtain raw data on the situation.

     Martinez said, "We expect the total shipment of photovoltaic modules to return to normal by the end of the second quarter

of 2023. We still don't know how the US photovoltaic market will develop, but according to preliminary information, some

detained photovoltaic modules have been released, and we hope that more photovoltaic modules will be available by the second

half of 2023

     John Smirnow, General Counsel and Vice President of Market Strategy at the American Photovoltaic Industry Association, also

pointed out that the uncertainty in the supply chain brought about by UFLPA regulations is the main factor leading to

fluctuations in the US photovoltaic industry.

     Smirnow said, "We are starting to see some photovoltaic modules being released, which is a positive development, but there

are still a large number of imported photovoltaic modules being detained, so there is uncertainty in this process. So how can

companies prove that their imported photovoltaic modules comply with UFLPA regulations? We believe these companies can do

this, but they need clear guidance from customs departments

     Smirnow believes that the UFLPA regulations, along with the ongoing investigation by the US Department of Commerce and

the resulting shift towards domestic manufacturing, will be the challenges facing the US photovoltaic industry in 2023.

     However, he believes that the development of the US photovoltaic market will improve starting from 2022. He said, "Then, as

more photovoltaic module manufacturing factories go online and operate in 2024 and 2025, we hope to reduce these supply

chain challenges. We hope that by then, the development of the US photovoltaic industry will begin to accelerate

     According to the Q4 2022 Insight Report on the US Photovoltaic Market released by Wood Mackenzie and the Solar Energy

Industry Association (SEIA) in December of last year, due to the preliminary ruling by the US Department of Commerce that

several companies violated tariff regulations, it is expected that these companies will face downside risks in 2023, although the

US Department of Commerce will not announce a final ruling on this case before May 1st of this year.

     Martinez stated that she expects US President Biden's executive order to avoid significant impacts from the US Department

of Commerce's tariff investigation before 2023 and 2024, but she is concerned about the supply-demand balance of photovoltaic

modules after the expiration of this executive order.

     The reconfiguration of corporate strategy is urgently needed

     Robb Jetty, Chief Operating Officer of DSD, a photovoltaic developer, stated that both the company and the US photovoltaic

industry have experienced significant impacts from policy fluctuations, as it involves the import of photovoltaic modules, which

is quite chaotic for them.

     Jetty said, "However, since the second half of 2020, the overall global supply chain has been facing challenges, and the

inventory of various photovoltaic components worldwide has begun to decrease, and this situation is still ongoing

     Jetty stated that supply chain disruptions such as labor shortages in shipping and trucking have led DSD and other

photovoltaic developers to abandon their immediate procurement strategies and instead purchase photovoltaic components in

bulk to ensure price and supply certainty.

     Previously, the photovoltaic industry specifically applied this strategy to the procurement of photovoltaic modules, in order to

utilize the investment tax credit regulations for renewable energy projects, and to ensure tax credits for these specific years by

investing sufficient funds in the components of the project, making renewable energy projects eligible to begin construction.

     Jetty said, "Now we have basically adopted this strategy and applied it to many other photovoltaic modules required for

photovoltaic projects. We have signed a large number of purchase orders and prepaid the deposit for purchasing rooftop

photovoltaic modules

     Jetty stated that for the 200 rooftop photovoltaic systems that DSD is currently installing, the company has paid a deposit to

ensure that these orders can be fulfilled.

     He said, "This brings us certainty in the supply of photovoltaic modules and locks in procurement prices to protect us from

the supply chain fluctuations experienced in the past few years

     Although Jetty believes that the Inflation Reduction Act provides an important impetus for the photovoltaic industry to

address adverse effects, he believes that it may take several years for the supply chain to return to normal.

     He said, "The impact of global supply chain fluctuations will not disappear soon, and we are dealing with the longest delivery

time for photovoltaic module availability

     Jetty also believes that the Inflation Reduction Act will drive growth demand in the photovoltaic industry, and that the US

photovoltaic industry will face supply shortages after the tariff ban expires in June 2024. Jetty also stated that it is almost

impossible for the United States to establish a reliable domestic supply chain to meet this demand in the next 18 months.

     Jetty said, "During this period, the domestic production capacity of photovoltaic modules in the United States is unlikely to

meet the needs of developers developing photovoltaic projects

     He pointed out that First Solar, a photovoltaic module manufacturer with a scale of ***** in the United States, produces

photovoltaic modules that are in short supply, and its orders have been scheduled until after 2024.

     Jetty said, "The United States simply cannot have enough photovoltaic module production capacity, or not enough capacity

to meet the market demand that the Inflation Reduction Act may bring. We will continue to rely on imported photovoltaic

modules in the coming years

     Smirnow also stated that time is the ****** obstacle to establishing the US photovoltaic module supply chain, including the

time required for manufacturers to choose specific locations for new factories. Due to the current uncertainty, he expects US

photovoltaic module manufacturers to reconfigure their supply chains, change production processes, and negotiate prices in

2023.

     Smirnow said, "This is a time factor, and with the passage of the Inflation Reduction Act, we will see a strong photovoltaic

module manufacturing base in the United States, and we are very certain about it. This is just a question, but how long will it

take to solve it

     The 'Inflation Reduction Act' will provide a 30% investment tax credit for photovoltaic systems by 2025, compared to 26%

before this law was enacted, and will decrease to 22% by 2023. Photovoltaic developers who prove that the steel and finished

products used in their photovoltaic projects are produced in the United States can receive an additional 10% tax credit, and

photovoltaic projects installed in communities or nearby areas that mainly rely on fossil fuel industries can also receive a 10% tax

credit.

     Therefore, the attractiveness of the photovoltaic industry has significantly increased, while at the same time, the supply chain

of photovoltaic modules is becoming increasingly uncertain.

     Marlene Motyka, the head of Deloitte's US renewable energy business, said that although many planned photovoltaic

projects in the United States have been postponed in 2022, she believes that almost no photovoltaic projects have been directly

cancelled and market demand has not been truly suppressed.

     Motyka stated that the extension of tax credits for wind power facilities and photovoltaic systems has supported market

growth. He said, "Some predictions suggest that by 2030, this law will incentivize the installation of 525GW to 550GW of utility

scale clean energy generation facilities, which is much higher than my original estimate of 300GW

     The US photovoltaic industry expresses optimism about future development

     Becca Jones Albertus, Director of the Photovoltaic Technology Office at the US Department of Energy, is more optimistic

about the ability to develop the photovoltaic module manufacturing industry and expects to build a very strong domestic

supply chain by 2025.

     Jones Albertu said, "Increasing photovoltaic module production capacity before June 2024 is a positive timeline. However, I

believe it is too early to say whether this goal can be achieved

     She added that although the preliminary ruling by the US Department of Commerce found evidence that the Southeast Asian

photovoltaic module suppliers under investigation were evading tariffs, no other unfavorable evidence was found, and these

companies found to be evading tariffs also had time to reconfigure their supply chains.

     Jones Albertus believes that the passage of the Inflation Reduction Act laid the foundation for the successful expansion of

the US photovoltaic industry, in part by eliminating some of the obstacles to domestic photovoltaic manufacturing.

     She said that the United States has a large amount of quartz ore, which is the material for manufacturing polycrystalline

silicon, a key component for producing photovoltaic cells. The challenges facing the expansion of the US photovoltaic

manufacturing industry are economic, such as rising labor costs and stricter environmental regulations on manufacturing

facilities.

     She said, "That's why the manufacturing production tax credits provided in the Inflation Reduction Act can be so powerful,

because they target different supply chain links and provide tax credits that can directly offset the higher costs of manufacturing

photovoltaic modules in the United States, making American manufacturing competitive compared to imported products

     Jones Albertus stated that after the passage of the Inflation Reduction Act in August last year, some manufacturers

announced plans to build 17 new photovoltaic manufacturing facilities in the United States until December 16th, with proposed

photovoltaic module production plants having a capacity of over 75GW.