According to the investigation of ITC, US president confirmed the implementation of US Section 201 to apply the protective tariff to the photovoltaic cells and modules, which will add additional tariff to the anti-dumping and countervailing duties currently existing. During the four years, the tax rate will be 30%, 25%, 20%, and 15% respectively. Regarding US Section 201, about 2.5GW of cells can be imported without tariff according to US Section 201; however, whether the 2.5GW of tax-free cells quota are based on “historical import data” or “shipment priority” has yet to be regulated by the law.
The content announced yesterday is slightly different from the suggestion proposed by ITC before, and many information is not very clear, including the countries exempted by US Section 201. The major observation point is whether Canada, that having more than 1GW module capacity, is exempted by US Section 201. In addition, according to the above content, US government may negotiate with China government to decrease AD/CVD tariff against polysilicon of US; thus, during the four years in the future, the tax rate may change again.
It is not confirmed whether the tax-free quota is determined by “historical import data” or “shipment priority”; however, the current module capacity of US is only about 1.6GW, and the seasonal capacity is only 400MW, so InfoLink think when will the 2.5GW quota been used up are still hard to tell.
Currently, the plan of building factories of most companies may not be finished until 2019, and the tax rate will decrease to 25% in 2019. According to the tax rate announced in this time and the tax-free quota, and compared with the third-party module cost added by 201 tax rate, the third party supplying for the US market still has advantage.
Therefore, if only the “cost” problem is taken into consideration, the necessity of expanding the cell capacity in US seems not very high; and for the module expanding depends to whether the module manufacturing cost in US can be controlled within US$ 0.18/W, if so, then the manufacturers can compete with companies having cost advantage in Southeast Asia.
Overall, the module demand of US still weak in 1H2018 and it is anticipated that the demand may recover in 2H18; however, as the tax-free quota of cells are up to 2.5GW, the overall demand of US market in 2018 will be a bit better than the previous anticipation.