It’s official: The bifacial tariff exemption is over

The office of the U.S. Trade Representative has removed the exemption for bifacial products from Section 201 tariffs, effective October 28.

Some time over the last 72 hours, the prediction made by Roth Capital came true: The Office of the U.S. Trade Representative (USTR) has reversed its position and removed an exemption for bifacial modules from the Section 201 tariffs.

We’re not sure exactly when this happened, as there is no date on the document buried on the USTR website, no press release, and pv magazine staff were unable to find any mention of this in the Federal Register. Nor did officials listed as contacts on the USTR document respond to pv magazine’s requests for comment when Roth Capital’s warning came out last Friday.

Regardless, the exemption will now end on October 28 “effective with respect to articles entered for consumption, or withdrawn from a warehouse for consumption”. Given the long lead times for ordering modules, this means that few bifacial panels that are not already on container ships are likely to slip through tariff-free.

 

“Surge” of bifacial predicted

The six-page note on the USTR site does shed some light on the thoughts behind the trade officials’ decision, with the office determining that the exclusion would “likely result in significant increases in imports of bifacial solar panels”, and warning that “such a surge is imminent”.

USTR further notes that “such panels will likely compete with domestically produced monofacial and bifacial solar crystalline silicon solar photovoltaic products in the U.S. market”.

Neither statement matches our understanding of the U.S. market. As noted by Roth Capital in its research note warning of the end of the exemption, given the current boom in solar construction and the backlog of module imports, the removal of the exemption is unlikely to affect import volumes in 2020. Simply put, orders have already been placed through the end of 2020.

Additionally, pv magazine does not know of any bifacial PV modules currently being made in the United States, or plans by U.S. manufacturers to make them any time soon.

In the bigger picture, per pv magazine’s calculation even when the four large U.S. factories which have come in the wake of the tariffs come online there will only be around 5 GW of U.S. PV module capacity. This is not even half enough to meet the demand this year, so multiple gigawatts of modules are and will continue to be imported, mostly from Asia – tariffs or no.

Given all of the uncertainty that the Trump Administration has introduced regarding trade, the reaction from the U.S. solar industry at times is simply frustration. On LinkedIn John Williamson, the founder and CEO of engineering consulting and software company KiloNewton described the removal as “a nonsense reaction to a nonsense exemption to a nonsense policy.”

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