From pv magazine Global

Researchers at the Universiti Teknikal Malaysia Melaka have outlined a techno-economic optimization approach to define the appropriate power sizing ratio (PSR) for inverters used in grid-connected PV systems.

The PSR is the ratio of the inverter’s rated power to the total rated power of the connected PV modules and is crucial to maximizing energy yield and income. “An undersized inverter limits the system’s ability to convert all the generated DC power to AC power, leading to potential energy losses,” the scientists explained. “Conversely, an oversized inverter incurs higher initial costs without a proportional increase in energy production.”

The proposed methodology uses a pattern search algorithm (PSA), which is an optimization technique commonly utilized for problems with complex relationships and potentially noisy data, to ensure an accurate representation of real-world inverter behavior.

The model considers radiation, convection thermal representations, and real-world weather data. It also takes into account data from the inverters’ datasheets to evaluate the efficiency curve of the devices. From this curve, it then extracts key points to identify efficiency values between the chosen data points.

“The model undergoes a calibration phase where the efficiency curve points are iteratively adjusted by the PSA until the estimated/modeled values closely match the actual measurements obtained from the real system over a predefined period,” the group explained. “This calibration step guarantees that the model accurately reflects the real-world performance of the system.”

According to the scientists, the model can estimate the annual power yield of a solar array for each iteration step through various DC/AC power ratios, which in turn allows PV system owners to find the optimized ratio that maximizes energy production.

They also warned that the proper selection of the optimal PSR needs to be complemented by economic considerations relating to inverter costs, operation and maintenance, inverter complexity, and monitoring systems. “It’s important to note that the cost function doesn’t directly represent monetary value but rather a relative measure of economic performance,” they stressed. “The actual economic feasibility would depend on specific system costs and electricity prices.”

The novel methodology was presented in the study “Techno-economic optimization of photovoltaic (PV)-inverter power sizing ratio for grid-connected PV systems,” published in Results in Engineering.

“Future research directions involve exploring the integration of additional factors into the model,” the research team concluded. “These factors could include advanced weather forecasting capabilities, dynamic pricing schemes, and potential application to different types of PV systems or even broader renewable energy systems.”

A petition was filed to the U.S. Department of Commerce and the International Trade Commission, as a coalition of solar manufacturers with operations in the U.S. allege that four Southeast Asian nations are exporting dumped goods from China, making it difficult for domestic manufacturers to compete on cost.

The coalition, signed as the American Alliance for Solar Manufacturing Trade Committee, includes First Solar, Qcells, Meyer Burger, REC Silicon, and others. The companies said the current “manufacturing renaissance” in the United States is under threat from heavily subsidized Chinese cells and modules that are alleged to be in infraction with antidumping and countervailing duty (AD/CVD) law.

“Conditions are untenable for American solar manufacturers,” said Mike Carr, executive director of Solar Energy Manufacturers for America (SEMA) coalition. “SEMA will continue to fight for strong trade enforcement and onshoring our supply chain so American companies can thrive and we can usher in a new era of clean energy independence.”

Commerce has 20 days to act on the petition and initiate an investigation if deemed necessary. If the International Trade Commission then finds a preliminary finding of material injury, this would be issued within 45 days of the investigation, and a final determination would not be issued until spring 2025. President Biden issued a 2-year pause on solar AD/CVD tariffs in 2022, which is set to end in June 2024.

AD/CVD laws assess steep tariffs on solar cells and modules that are found to be in violation of dumping product in other countries to avoid tariffs. In previous solar AD/CVD cases, goods found in violation have been assessed tariffs with costs as high as 50% to 250% of the cost the shipped products.

The new petition calls for investigation of goods shipped from Vietnam, Cambodia, Thailand, and Malaysia. Roth Capital Partners previously warned that India may also be included in the petition, but it was ultimately not included in the list of named countries.

The coalition of U.S. manufacturers said “China’s unfair and illegal trade practices have inundated the market with dumped solar panels, undercutting the U.S. ability to compete.” Solar module prices have fallen to a record low, falling more than 50% over the last year. The coalition said if U.S. developers sourced 55% of their manufactured solar goods domestically, the solar manufacturing industry would support 900,000 U.S. jobs by 2035. Furthermore, onshoring the solar supply chain could cut global solar manufacturing emissions by 30%, said the coalition.

If Commerce takes up the investigation, it is expected to be a positive development for manufacturers like First Solar, while being a negative development for global suppliers like JinkoSolar and Canadian Solar. Roth Capital Partners said the investigation would also mark an “incremental negative” for the U.S. utility-scale industry broadly, including for tracker manufacturers like Nextracker and Array Technologies. Array Technologies called for the petition to be rejected.

“The Inflation Reduction Act has super-charged the expansion of the American solar supply chain, which is more than just modules—it’s trackers, inverters, balance of electrical systems and polysilicon manufacturers,” said Kevin G. Hostelter, chief executive officer, Array Technologies. “We need to keep growing solar deployment to create jobs and bolster our energy independence. More duties will only cause uncertainty and unnecessary project delays, holding the U.S. back in meeting our clean energy deployment and manufacturing goals.”

The Solar Energy Industries Association (SEIA), Advanced Energy United, American Council on Renewable Energy (ACORE), and American Clean Power Association (ACP) issued a joint statement in opposition to the petition.

“We are deeply concerned the AD/CVD petitions will lead to further market volatility across the U.S. solar and storage industry and create uncertainty at a time when we need effective solutions that support U.S. solar manufacturers,” said the joint statement. “We need constructive actions, like the Advanced Manufacturing Tax Credit and other policies, to expand domestic solar manufacturing and deploy clean energy at scale and speed to serve growing electricity demand.”

An industry note from Philip Shen, managing director, Roth Capital Partners, warned that the United States may soon face another ongoing tariff enforcement saga.

The note said that based on new regulations from the Department of Commerce, new antidumping and countervailing duty (AD/CVD) cases could be filed as soon as April 25.

AD/CVD laws assess tariffs on goods that are found to be dodging import duties by dumping products in other countries before shipping them to the U.S. In the previous AD/CVD proceeding, four Southeastern Asian countries, Vietnam, Cambodia, Thailand and Malaysia, which were responsible for roughly 80% of the U.S. supply of solar components, were alleged as potentially harboring dumped products from China.

Resulting tariffs of components found in violation ranged as high as 50% to 250% of the cost of shipped goods. The looming threat of tariffs led to high levels of risk and uncertainty in the market, and about 20% of utility-scale solar capacity was delayed or cancelled in the first half of 2022 due to this risk. In June 2022, President Biden placed a two year pause on new solar AD/CVD tariffs, which is set to expire this summer.

Roth said it remains “difficult to gauge” how high the tariffs could be in the new case later this month.

An industry contact told Roth that the petitions for AD/CVD cases will likely occur as soon as possible after the April 25 date, because petitioners “want AD/CVD preliminary decisions to be coming out during the heat of election season.”

Roth also noted that it is possible India will join the four Southeastern Asian nations in this round of AD/CVD investigation.

Auxin Solar, a small solar panel manufacturer with operations in California, has filed a lawsuit against the U.S. Department of Customs and Border Patrol (CBP) and Department of Commerce for failing to collect fees and credits from solar imports related to antidumping and countervailing duties (AD/CVD) laws.

Auxin began a long saga related the enforcement of AD/CVD on solar goods imported to the U.S. when it filed a petition alleging that four Southeast Asian nations were in violation of trade laws.

Solar component suppliers in Vietnam, Cambodia, Thailand, and Malaysia, responsible for roughly 80% of the U.S. supply at the time, were alleged to be in violation of harboring tariff-dodging goods from Chinese manufacturers. Goods found in violation of AD/CVD laws can be assessed with tariffs as high as 50% to 250%.

In June 2022, President Joe Biden issued a moratorium on solar tariffs, pausing any collection of fees for two years. The move came as solar industry advocates pleaded with the administration to halt tariffs, citing a great deal of uncertainty and solar project delays and cancellations related to the financial risk of tariff assessments.

Auxin argued in the December 29, 2023 suit that Commerce and CBP are not required to follow Biden’s executive order placing a moratorium on tariffs. Biden reaffirmed the June 2022 order in April 2023 with a veto.

The solar panel manufacturer claimed that it was unlawful for Commerce to enact procedures that prevent the application of AD/CVD tariffs, the liquidation of seized assets, and the collection of cash deposits for imported solar goods. It requested that the Court of International Trade reject the moratorium as “an abuse of discretion” by Commerce.

The lawsuit claims Commerce has supported “lawless” solar cell and module marketplace characterized by “a massive and sustained” wave of cheap solar components. Auxin and its co-plaintiff Concept Clean Energy claim the pause on tariff collection has denied its right to relief from dumped Chinese products.

Read more about the AD/CVD saga and its implications for U.S. solar component supply from an online reissue pv magazine print edition: “A moral trilemma for U.S. solar procurement.”

The Department of Commerce made its final determination on the ongoing antidumping and countervailing duties (AD/CVD) case, finding that major suppliers in Thailand, Malaysia, Cambodia and Vietnam will be assessed tariffs for circumventing goods. 

The final determination was in line with the preliminary ruling made in December 2022, assessing a blanket finding of circumventing for the four named nations. Only three major suppliers from the four named countries were found not to be in violation: Jinko, Hanwha Qcells and Boviet. 

Clean Energy Associates (CEA) said that certain suppliers will not be able to avoid paying tariffs and are unlikely to export directly to the U.S. market after Biden’s tariff moratorium lifts on June 6, 2024. 

In an industry note, CEA said there are multiple pathways to continue to export to the U.S. duty free: 

1. Use a non-China wafer to make the cells
2. Use no more than two named bill of materials components (backsheets, glass, silver paste, EVA, junction boxes, aluminum frames) from China 
3. Be found not to be circumventing duties

CEA said that most suppliers will find it relatively easy to switch bill of material supply chains under the “no more than two” rule. As a result, CEA said it is likely module supply from Southeast Asia will continue, though some suppliers will likely have to adjust their supply chains to continue to enter the U.S. duty-free.

However, for cells exported directly to the U.S., it is more challenging to avoid duties. These suppliers will not be able to take advantage of the “no more than two” ruling.

“This limits the already scarce potential available supply of cells for U.S. module manufacturers, including the many module factories which have been announced and/or are under construction,” said CEA.

CEA noted that manufacturers in third countries, like India and Mexico, can import PV cells from the named countries, use these in module assembly, and export to the U.S. without being subject to duties. This applies to cells that would otherwise be subject to duties if exported directly to the U.S.

While the final ruling was not a positive or negative surprise in relation to the December 2022 preliminary ruling, it is set to pose challenges in cell supply in the U.S. Read more about the solar industry’s reaction to Commerce’s final ruling here.

First Solar, the leading U.S. solar manufacturer of cadmium telluride thin-film solar panels, revealed that a third-party audit confirmed that migrant workers employed as janitorial and security staff  at its operations in Malaysia were victims of forced labor. The audit found that four subcontractors charged workers recruitment fees and withheld pay and passports. 

The company said it is requiring the facilities to improve working conditions, outlining actions taken in its 2023 sustainability report. First Solar said it will perform periodic reviews to ensure the subcontractors are not using forced labor. It will also limit work weeks at the facility to 60 hours and require workers take at least one day off every week.

Our onsite service providers have since returned all passports and unlawful wage detentions to the workers and updated their policies to prevent future fees. In addition to organizing an Responsible Business Alliance briefing session for our onsite service providers, First Solar contracted a third-party to conduct an investigation and develop a reimbursement plan. We are working with our onsite service providers to ensure the recruitment fees are paid back to both current and recent workers in accordance with RBA guidelines and best practices.

First Solar reported the activity “to raise awareness of modern slavery risks that hide in plain sight and to illustrate the value of an independent third-party social audit conducted in a credible, comprehensive manner,” said Mark Widmar, chief executive officer, First Solar. 

The report highlights the increased focus on transparency in supply chains in the United States as it moves to divorce itself from unethical labor practices in the solar manufacturing sector. Enforcement of laws like the Uyghur Forced Labor Prevention Act (UFLPA) and antidumping / countervailing duty (AD/CVD) are placing increased responsibility on suppliers to show their goods are untainted by unethical practices if they want their goods to reach U.S. markets. 

“What First Solar has done is the critical due diligence that all companies need to do around the world to ensure they are identifying and remediating forced labor in their supply chains,” said Laura Murphy, human rights and contemporary slavery professor, Sheffield Hallam University. “It does happen, and companies have to be on the lookout for it.” 

While First Solar is not exposed to the forced labor risks in the Xinjiang region under scrutiny through the UFLPA, the findings of unethical practices in the Malaysian facility underscore the need for a thorough understanding of the origin of goods from raw material to finished component.

“The solar industry will anchor the global transition to a sustainable energy future, and we believe that it must do so responsibly,” said Widmar “Quite simply, our industry’s work to power the energy transition and enable the fight against climate change does not serve as credits to offset its social and human rights obligations.”

Despite U.S. announcing record levels of solar manufacturing capacity coming online, with over 155 GW of production capacity along the solar panel supply chain announced over the past year alone, demand is still outpacing domestic supply. The domestic content requirements to qualify for a 10% tax credit adder within the Inflation Reduction Act are further pushing demand for U.S.-made panels, and First Solar is currently booking sales as late as 2030 for its domestic products. These forces will likely require U.S. developers to continue to source non-U.S. panels for years to come, suggesting that supply chain transparency and traceability will continue to be an important focus for suppliers.

Floating photovoltaics (FPV) is a form of renewable energy being evaluated worldwide as a potential solution to the land-use issue in electricity generation. For countries limited in land availability, like many island nations in Southeast Asia, FPV may represent a path forward to an emissions-free economy. 

The U.S. National Renewable Energy Laboratory (NREL) partnered with the United States Agency for International Development (USAID) Regional Development Mission for Asia to evaluate the technical potential for FPV for the Association of Southeast Asian Nations (ASEAN). ASEAN has set a target of 35% renewable energy installed capacity by 2025. 

The NREL report estimated technical potential for 10 ASEAN countries and is coupled with a data set available through a solar data explorer tool. 

“FPV arrays are situated on water bodies such as lakes, reservoirs, or water treatment ponds, where they can be installed alone or in combination with hydropower dams,” said NREL.  

NREL said FPV is particularly attractive in locations where hydropower infrastructure is planned or already in place and increased frequency or severity of drought may raise pose reliability concerns for hydropower production. Southeast Asia is particularly exposed to this hydropower underproduction risk as it has a strong network of established facilities.

“Additionally, much of the region is covered by rainforest ecosystems,” said Evan Rosenlieb, a geospatial data scientist at NREL. “Siting PV on water can be a way to increase renewable energy generation without deforestation.” 

Southeast Asia is also a hotbed for the growing practice of aquaculture, or raising fish, crustaceans, and aquatic plants in a controlled water body. These sites are targeted as another potential match for floating PV. 

“This emerging combination of aquaculture and photovoltaics, commonly referred to as AquaPV, can allow countries to co-locate energy and food production on existing natural or artificially created water bodies while minimizing the overall environmental impact of both sectors,” said Prateek Joshi, NREL energy engineer.

Joshi and the NREL team said aquaculture and solar may help boost food security in the region, offering dedicated, resilient energy production to critical food sources.

The data accompanying the report are publicly available as a resource for developers interested in learning more about the technical and economic potential of FPV in the region.

“This data will lead to more discussions and can inform decisions on the potential role of FPV in the region. It wouldn’t have been possible without all the existing work of previous FPV studies and previous RE Data Explorer tool development,” Sika Gadzanku, the NREL energy technology and policy researcher.

Moved forward by a 56-41 vote, the U.S. Senate resolved to repeal the two-year pause on tariffs for solar goods from four Southeast Asian countries responsible for about 80% of the U.S. solar panel supply chain. Nine Democrats joined the largely Republican voting group in passing the resolution.

Passed in June 2022 by President Joe Biden, the moratorium halted tariffs on goods shipped from Vietnam, Malaysia, Thailand, and Cambodia. Solar suppliers in these nations are under investigation for harboring tariff-dodging components manufactured in China.

The tariff exemption applies to modules that are imported before June 6, 2024, or modules installed on project sites before December 2024.

The Department of Commerce made a preliminary ruling in December that some suppliers from the four countries are guilty of violating anti-dumping and countervailing duty (AD/CVD) laws. The investigation is expected to conclude with Commerce’s ruling, scheduled for May 2, 2023.

Goods found in violation of anti-dumping and countervailing duty laws would be retroactively assessed with tariffs ranging between 50% to 250% of their shipped value.

Prior to Biden’s 2022 moratorium, the threat of tariffs created supply issues and high levels of risk that led to cancelled and delayed projects. About 20% of utility-scale solar capacity was delayed or cancelled in the first half of 2022 due to supply problems and uncertainty.

Biden’s two-year moratorium is meant to act as a supply bridge while U.S. domestic solar manufacturing ramps up. 

The solar industry has warned that lifting the pause on tariffs now would greatly challenge the nation’s transition to clean energy, as the U.S. currently sources roughly 80% of its solar components from the four Southeast Asian nations.

“The legislation will impose $1 billion in retroactive tariffs and cause 30,000 Americans to lose their jobs this year,” said Abigail Ross Hopper, president and chief executive officer of the Solar Energy Industries Association.

“The United States relies on foreign nations, like China, for far too many of our energy needs, and failing to enforce our existing trade laws undermines the goals of the Bipartisan Infrastructure Law and Inflation Reduction Act to onshore our energy supply chains, including solar,” Senator Joe Manchin said in a statement. “I cannot fathom why the Administration and Congress would consider extending that reliance any longer and am proud to join this Congressional Review Act (CRA) to rescind the rule.”

Ross Hopper said the U.S. does not have enough solar manufacturing capacity to meet demand, and the remaining 14 months of the moratorium are needed to “close the gap.” 

The legislation to repeal the moratorium was moved forward via the CRA and spearheaded by House Representative Dan Kildee (D-MI). Kildee argues that the resolution will help American workers and “hold those who violate U.S. trade laws accountable.”

However, President Biden’s administration said it will veto the resolution, retaining the moratorium. “The Administration strongly opposes H.J. Res. 39,” the White House said in a press release.

“The Senate’s action needlessly undercuts the critical clean energy growth that has been made since the passage of the Inflation Reduction Act. I am grateful for President Biden’s steadfast support of solar energy and applaud his intention to veto this harmful resolution,” said George Hershman, chief executive officer, SOLV Energy, a leading utility-scale solar developer. 

Gregory Wetstone, president and chief executive officer of the American Council on Renewable Energy (ACORE), said the resolution would “bring a halt to the booming solar growth in the U.S.”

“To prevent the loss of tens of thousands of solar jobs, reduce electricity costs, and avoid an increase in harmful greenhouse gas emissions, we urge President Biden to veto this destructive legislation,” he said.

The American Clean Power Association (ACP) called the prospect of retroactive tariffs “punitive,” arguing that it would harm U.S. workers.

“In recent months, the American solar industry has announced billions of dollars in investments in domestic solar manufacturing and energy production facilities. Continued success requires collaboration between American government, business, and labor to overcome real competitive barriers and reclaim America’s solar technology dominance,” said Jason Grumet, chief executive officer, ACP.

President Joe Biden is expected to veto a move by Congress to lift a two-year pause on tariffs for goods shipped from Vietnam, Cambodia, Thailand and Malaysia, which are responsible for roughly 80% of the U.S. supply of solar components.

“The Administration strongly opposes H.J. Res. 39, which would disapprove a rule issued by the Department of Commerce (Commerce) that temporarily suspends the collection of certain duties on imports of solar cells and modules,” said the White House in a press release.

The four Southeast Asian countries were allegedly harboring tariff-dodging products from China, which under antidumping and countervailing duty (AD/CVD) laws could lead to tariffs that range between 50% to 250% of the cost of shipped goods.

This looming threat of tariffs created an untenable level of risk that cascaded into cancelled and delayed projects. The effect was so stark that it led the Solar Energy Industries Association to cut its project deployment forecast in half for the year.

About 20% of utility-scale solar capacity was delayed or cancelled in the first half of 2022 due to supply problems and uncertainty. This uncertainty was temporarily lifted when President Joe Biden placed a 24-month moratorium on solar tariffs from the four nations on June 5, 2022.

This April, the House Ways and Means Committee voted 26-13 to end the moratorium and restore tariffs via the Congressional Review Act.

“We cannot allow foreign solar manufacturers to violate trade laws, especially when it comes at the expense of American workers and American businesses,” said Representative Dan Kildee (D-MI).

The tariff exemption applies to modules that are imported before June 6, 2024, or modules installed on project sites before December 2024. Biden’s two-year moratorium is meant to act as a bridge while U.S. domestic solar manufacturing ramps up, said Reuters.

“The United States currently lacks the capacity to produce solar panels and cells in adequate volumes to meet domestic demand,” said Abigail Ross Hopper, president and chief executive officer, Solar Energy Industries Association. “This strategic approach protects existing jobs while new ones are added, but it also helps sustain the robust environmental, national security and job-creating benefits offered by U.S. solar deployment.”

Commerce made a preliminary ruling in December that suppliers from the four nations are guilty of breaking AD/CVD laws. The final decision for this ruling is scheduled for May 2, 2023.

A small coalition of Democrat and Republican congress members filed legislation to repeal the pause on tariffs shipped from four Southeast Asian countries responsible for 80% of the US supply of solar modules. 

“We cannot allow foreign solar manufacturers to violate trade law, especially when it comes at the expense of American workers and businesses,” wrote Congressman Dan Kildee (D-MI), who filed the repeal attempt via the Congressional Review Act. He was joined by Republicans Bill Posey (FL), Bob Latta (OH), and Garret Graves (LA), as well as Democrats Bill Pascrell (NJ) and Terri Sewell (AL). 

Since March 2021, the solar industry has reeled from potential tariffs on goods manufactured in Cambodia, Malaysia, Thailand and Vietnam, four nations alleged of harboring Chinese goods in violation of anti-circumvention laws. 

Tariffs on solar goods enforced under anti-circumvention laws have historically exceeded 50% to 250%. The looming threat of tariffs created an untenable level of risk that cascaded into cancelled and delayed projects. The effect was so stark that it led the Solar Energy Industries Association to cut its project deployment forecast in half for the year.

About 20% of utility-scale solar capacity was delayed or cancelled in the first half of 2022 due to supply problems and uncertainty. This uncertainty was temporarily lifted when President Joe Biden placed a 24-month moratorium on solar tariffs from the four nations on June 5, 2022.

The tariff exemption applies to modules that are imported before June 6, 2024, and installed project sites before December 2024.

(Read: “White House freezes solar tariffs: An industry reacts“)

On December 2, 2022, the US Department of Commerce made a preliminary determination that numerous major and minor suppliers in Southeast Asia are in violation of anticircumvention laws.

“The Biden administration found in its own investigation that China is evading U.S. tariffs on solar imports, but has paused action on this matter, which is unacceptable,” said Kildee. The repeal will “help America’s domestic solar manufacturing industry grow to meet our nation’s energy needs,” he said. 

“The Biden Administration continues to put American manufacturers last,” said Congressman Latta.

Last August, the Biden Administration passed a record-breaking $370 billion package, the Inflation Reduction Act (IRA), supporting climate and energy measures, including over $60 billion in rich incentives the domestic manufacture of solar components and other cleantech. But solar industry members say the US needs time to build its manufacturing capacity, and cutting off supply of panels now would be detrimental to the effort to mitigate the worst effects of climate change.

“The world is not yet on track to limit global warming to 1.5 degrees Celsius compared to pre-industrial levels, but solar can help us change that trajectory,” said Scott Wiater, president and chief executive officer, Standard Solar. “The U.S. can play a big role, but to lower carbon emissions sufficiently and achieve our country’s climate goals, we have to deploy 70 GW of solar a year in the next few years.”

The US currently produces about 7.5 GW of solar panels per year. The IRA could increase that number to 15 GW over the next two years, “but that would still not be nearly enough capacity to rely solely on domestic panels,” said Wiater.

(Read: “Solar tariffs are not the answer”)

The Congressional Review Act resolution will expire after 60 days if not passed. If Biden’s policy is repealed, the move would heavily damage solar panel supply and project installations in the near term.

“Fair trade cannot exist where one side plays by the rules and the other lies, cheats, and circumvents like the Chinese Communist Party. Last year the Commerce Department wisely heeded our bipartisan calls to probe CCP corruption in producing solar cells and modules. They confirmed that our trade laws are being evaded by Chinese solar companies. We need strong tariffs now,” said Congressman Pascrell.

Over the last year, the threat of tariffs has been one of the most significant headwinds in the deployment of solar in the United States. Solar deployments ground to a near-halt as industry-wide uncertainty unfolded following the Department of Commerce’s (DOC) March 28 announcement that it would launch an investigation into alleged antidumping violations by Chinese solar manufacturers.

Goods found in violation could have tariffs as high as 50% to 250% of the cost of goods, creating an untenable amount of risk for project developers. The Energy Information Administration said about 20% of utility-scale solar projects, sized 1 MW and up, were delayed in the first half of 2022, largely due to module supply shortages related to the investigation, as well as to COVID-19 slowdowns and goods seizures from the Uyghur Forced Labor Prevention Act (UFLPA).

The investigation was ignited by a petition filed by California-based solar module manufacturer Auxin Solar requesting that the DOC review solar panel imports from Chinese companies working in Cambodia, Malaysia, Thailand and Vietnam, announcing that it was launching an antidumping investigation into those companies. About 80% of the US supply of crystalline silicon solar modules come from the four nations. The Solar Energy Industries Association cut its forecast for solar installations in 2022 by 46% immediately following the announcement of the investigation.

In June, the Biden Administration placed a two-year moratorium tariff on solar goods, partially reopening module supply to the U.S. The executive order was celebrated by the solar industry, but damage had already been done. Even in light of the moratorium, research firm Wood Mackenzie lowered its 2022 installation projections by 6.3 GW from pre-investigation announcement forecasts.

DOC announced that the determination, originally expected to be made on November 28, 2022, has been pushed to December 1, 2022. It the final decision was also pushed back three days to May 1, 2023.

The deadline extension was requested by Auxin Solar. Auxin said Commerce needs to “fully develop and complete records of the inquiries.” The company said Southeast Asian PV suppliers have “misled lawmakers by failing to provide Commerce with all of the available information in a timely manner to quickly reach a preliminary conclusion.”

Tariffs related to AD/CVD violations have historically been high. The current AD rate for Chinese companies found in violation can reach 238.95% of the cost of goods. Dating back to 2012, solar tariffs on Chinese antidumping have ranged from less than 1% to over 100%. In 2017-18, major PV suppliers Trina Solar saw 92.5%, Risen Energy 100.79%, Canadian Solar 95.5%, JinkoSolar 95.5% tariffs imposed.

The original AD and CVD investigations on imports of crystalline silicon PV products were launched in November 2011. The US International Trade Commission determined that domestic producers were being materially hurt by the imports, and the Commerce Department in December 2012 imposed import tariffs. In 2019, the department extended both import tariff orders.

“For years, Chinese solar producers have refused to fairly price their products in the U.S. and have gone to significant lengths to continue undercutting American manufacturers and workers by establishing circumventing operations in countries not covered by those duties. Fair trade and enforcement of our trade laws are essential to rebuilding the American solar supply chain and making Solar in America again,” said Auxin Solar.

U.S. solar developers and Southeast Asian solar goods providers alike will hope the May 2023 determination will find goods not in violation. The ongoing saga highlights the fragility of global supply chains and contextualizes the U.S. push to boost domestic solar manufacturing.

On June 5, the Biden administration announced a 24-month tariff exemption on solar modules manufactured in Cambodia, Malaysia, Thailand and Vietnam. 

The move comes as a direct response to the industry-wide uncertainty that has unfolded since the Department of Commerce (DOC) March 28 announcement that it would act on a petition filed by California-based solar module manufacturer Auxin Solar requesting that DOC review solar panel imports from Chinese companies working in Cambodia, Malaysia, Thailand and Vietnam, announcing that it was launching an antidumping investigation into those companies. 

Tariff risk for solar goods sourced from the four nations exceeded 50% to 250%, creating an untenable level of uncertainty that cascaded into cancelled and delayed projects. The impact was so stark that it led the Solar Energy Industries Association to cut its project deployment forecast in half for the year. 

Paul Wormser, vice president of technology with Clean Energy Associates (CEA) told pv magazine USA that buyers and suppliers were essentially at a standoff, where neither the buyer nor the seller wanted to accept the risk. Neither party felt they could win in a negotiation, but both had something to lose if they didn’t negotiate. 

Wormser said the executive action will be impactful in removing a piece of that uncertainty in the near term. “Most people feel this was a positive move and very helpful to managing some of the challenges on the table right now,” he said. 

The move paves the way for supply contracts to get signed, prices to get better estimates, and factories and shipments from the four nations under investigation to get back on track. 

As for the latent impact from the investigation, Wormser said that projects did not go away entirely. “We did not see ‘demand destruction.’ The demand is still there, it is just unfulfilled. Instead of projects disappearing, a number of projects just changed their schedules. There will be a catch-up in deployment in what we had hoped to see in 2022, but that catch-up will take quite some time,” said Wormser. 

Other threats to supply 

“Unfortunately, there’s still going to be a dip in US deployments this year, versus what most of us would have predicted at the beginning of the year,” said Wormser. “There are ongoing issues with WRO (the Hoshine Withhold Release Order), there are new issues looming with UFLPA (Uyghur Forced Labor Prevention Act), and even though this particular issue of AD/CVD was ‘solved’ on Monday, it’s substantially towards the middle of the year before we had that solved.” 

Wormser said the UFLPA implementation is something to watch in the coming weeks. The act intensifies the burden of proof on importers, as they must prove that their goods must have no connection to the Xinjiang region of China, which has credible allegations of forced labor to the nation’s Uyghur community. 

He said that Xinjiang is the “center of gravity” for the world polysilicon supply chain, with a little less than half of the global polysilicon supply coming from the region. However, there is little to no wafer or cell manufacturing in the region, and there has never been a lack of absolute supply of polysilicon globally. China has made numerous announcements to move polysilicon production into other regions, so the UFLPA may not be as disastrous to solar module supply as it first appears. 

The WRO has led to the US detaining hundreds of MW of solar modules that were headed for US projects, but Wormser said that this pressure will continue to ease as module suppliers are now aware of what supply chain documentation is needed to clear Customs. 

The glut of undelivered products as a result of the triple-threat to US solar trade may take quite some time to reach US project sites. Wormser said the industry may be playing catch-up with this unserved demand into 2024. In the meantime, jobs have been lost, new jobs haven’t been created, and projects have been delayed. While it won’t be an overnight success, the softening of this trade triple-threat over time will lead to a steady supply flowing again, with US jobs and projects following. 

US manufacturing 

Concurrent with the two-year halt of solar tariffs on major Southeast Asian panels suppliers, the Biden Administration invoked the Defense Production Act and said it is using the full power of federal procurement capabilities to boost US-made solar. Master Supply Agreements will be put in place to enable domestic clean electricity providers to sell products to the US government rapidly, and US-made solar will be given “super preference” in federal procurement efforts. 

Christian Roselund, senior policy analyst, CEA, said the actions in total will likely not be enough to give a meaningful boost to US solar manufacturing. While every bit helps, running a solar module factory is much more costly in the United States than China, Southeast Asia, Turkey, or India, largely due to the wide gap in labor costs. Roselund said significant incentives to address the cost differential are likely the only path forward to make US solar competitive.

He added that CEA is still analyzing what the Defense Production Act means for US solar. He said that in the past, the act has been invoked to order US manufacturers to respond to crises, like making masks and respirators for Covid-19 response or munitions in wartime. 

“But I still haven’t seen anywhere in (the records), where the Defense Production Act has been used in a way that offsets higher operating costs. Because even if you provide grants and loans for the initial building of a factory, that doesn’t address the operating cost. It’s the medium to long term profitability that you have to worry about. What is needed is something to offset that price premium,” said Roselund. 

He said Jon Ossoff’s Solar Energy Manufacturing for America bill would do just that. However, it was tied up with the Build Back Better Act, which Sen. Joe Manchin (D-WV) shut down last December. Recently Democrats have voiced optimism that Manchin will cooperate on a climate bill, but Roselund said there is no guarantee anything meaningful will get by Manchin’s negotiations. 

The dominant story in solar for 2022 has been the Department of Commerce’s investigation into alleged anticircumvention/antidumping violations of four solar panel suppliers Southeastern Asian countries suspected of harboring Chinese solar goods. Tariffs attached to goods supplied by these countries could range 50 to 250% of the cost of goods and would back-date to the February filing by US-based manufacturer Auxin solar.

The uncertainty and risk level caused by this investigation essentially froze the solar industry in its tracks, with hundreds of megawatts of projects cancelled or delayed and the industry cutting its forecasts for deployment this year in half. This uncertainty will now be alleviated, for now, as the Biden Administration enacted a 24-month moratorium on tariffs from these locations.

This development came with praise from most major players in the solar industry, save US-based manufacturers like First Solar. One of the major criticisms of the investigation was that it appeared to be a feeble, poorly planned attempt to boost US-based manufacturing. Many industry players said they were open to supporting domestic manufacture of US solar goods, but that the tariffs were a short-term measure that blindsided developers and crushed deployment in the near- and mid-term.

The moratorium was launched alongside a few other actions designed to support domestic manufacturing, indicating the White House heard the near-uniform message from the solar industry that executive actions and stated goals were misaligned. With these new actions, the Biden administration is steering the market back toward the high bar of 100% carbon-free electricity by 2030, among other climate-driven emissions goals.

While the actions have been generally celebrated, the industry is still awaiting long-term industrial policy like the provisions introduced in earlier drafts of the Build Back Better Act. It is calling for a swift end to the investigation for greater long-term clarity.

“While I applaud the President for his leadership in building a brighter future today, the lingering threat of tariffs stemming from the ongoing circumvention case will continue to jeopardize our clean energy progress. I strongly urge the Department of Commerce to work toward a swift end to this case and put the solar industry fully back to work.” George Hershman, CEO, SOLV Energy

In addition to the halt of tariffs, the White House invoked the Defense Production Act for clean energy, and stated goals to use the full power of federal procurement through master supply agreements and giving solar goods “super preference” status.

The Defense Production Act

In pursuit of a rapid expansion to 22.5 GW of domestic solar manufacturing by 2024, the Defense Production Act (DPA) of 1950 was invoked. This act will not end the antidumping investigation, but it will eliminate the provision that would have back-dated tariffs to the date of the February Auxin Solar petition.

The DPA, to be administered by the Department of Energy will be directed to boost five key technologies, including solar panel parts including modules and module components, insulation for buildings, efficient electric heat pumps for heating and cooling, equipment for making electricity-generated fuels, including electrolyzes, fuel cells, and related platinum group metals, and critical power grid infrastructure like transformers.

The Act will encourage strong labor standards, including agreements for project labor and community benefits that ensure prevailing wages are paid and a quota of local hiring is met. The administration also stated goals of environmental justice and empowering clean energy transition in low-income communities that have historically (and continue to) bear an inequitable burden in energy-related injustices.

Following the announcement, the Biden administration said it will meet with industry, labor, environmental justice, and key stakeholders to enable a strong implementation of the DPA.

Federal procurement

The administration said it is also using the full power of federal procurement in action to increase domestic manufacturing capacity. 

Master Supply Agreements will be put in place to enable domestic clean electricity providers to sell products to the US government rapidly and efficiently. Such agreements standardize contracts, making them easier to administer, and supporting transparent quality control for all parties involved.

It also enacted the use of “Super Preferences”, which apply domestic component content standards for federal procurement of solar projects. The procurement will be in alignment with the Buy American Act.

The White House said these actions combined will pave the way for 10 GW of solar procurement over the next decade by the United States government alone. In cooperation with local and state governments and municipal utilities, the administration said the actions will make a potential market impact of as much as 100 GW over the next decade.

The Biden Administration’s briefing on these actions, plus existing actions already in place to support US solar can be found here.

The US Department of Commerce (DOC) launched an investigation into suspected antidumping and anticircumvention in four Southeastern Asian countries that supply 80% of the nation’s solar panels. If violations are found, a 50-250% tariff can be placed on solar panels entering the US. Module prices can represent 50% or more of a project’s cost, so for a $300 million utility-scale project, that’s as much as $375 million in risk. What’s more, the fee is retroactive to the February 8th petition by Auxin Solar led DOC to launch the investigation.

The Solar Energy Industries Association (SEIA) reports that roughly 75% of companies report cancelled or delayed module supply, 50% said that 80% or more of their 2022 project pipelines are at risk, and that the investigation has a “devastating negative impact” on 60% of solar and 35% of storage businesses.

In his industry note, Philip Shen, managing director, ROTH Capital Partners, wrote, “the module procurement process has been turned upside down.” He continued to share that some solar developers may be willing to take on the risk and continue to procure and deploy, but that activity will mostly occur in the distributed generation space rather than the utility-scale. “Our AntiCirc checks this week suggest C-Si utility scale module volume for the rest of the year may largely shut off,” said the note.

Shen’s team believes the DOC will take the full 150 days it is allotted to make a determination on the case, which places the deadline on August 26th. He notes that the passing of Sen. Jon Ossoff’s (D-GA) Solar Energy Manufacturing for America Act may play a role in the determination.

The note added that mid-week, facilities in Vietnam, Malaysia, and Cambodia have started to reduce production.

Shen’s team has also noted an increase in power purchase agreement (PPA) prices and a trend of smaller developers reselling projects to larger developers.

Costs are particularly rising in the distributed generation space, with pricing skyrocketing to $0.60-$0.70/W, rising from last year’s $0.40-$0.50/W/ This translates to residential end-user costs rising from $4-4.50/W to nearly $6/W, said ROTH.

In reaction to the launched investigation, American Clean Power Association CEO Heather Zichal wrote, “American workers will bear the pain of the decision to allow one rogue antagonist (Auxin Solar) to abuse and manipulate trade laws for their own gain. The 230,000 proud Americans who work in the solar industry are calling on President Biden and Secretary Raimondo to reverse their decision and bring this matter to a speedy conclusion. Every day this investigation hangs over the solar community is a day of lost jobs and postponed solar projects critical to the Administration’s climate agenda.”

Array Technologies, a solar mount/tracker provider, released its fourth quarter results, and issued a strong forecast for revenues this year. This comes despite the Department of Commerce’s investigation into antidumping and anticircumvention cases levied against four Southeastern Asian countries that supply 80% of the nation’s solar panels.

In an industry note, Phil Shen, managing director, ROTH Capital Partners, said the strong guidance initially came as a surprise, as the Solar Energy Industries Association reports that roughly 75% of companies report cancelled or delayed module supply, 50% said that 80% or more of their 2022 project pipelines are at risk, and that the investigation has a “devastating negative impact” on 60% of solar and 35% of storage businesses.

However, ROTH noted that the strong guidance may be a result of a strong relationship between Array Technologies and First Solar, a US-based manufacturer of thin-film CdTe solar panels. ROTH speculates that Array may be paired with a majority or a substantial amount of the 9GW module delivery expected from First Solar this year.

Array also has a strong relationship with South Korean panel manufacturer Hanwha, which is currently not under any anti-circumvention investigation. Hanwha performs final assembly of the modules in the US and is expected to produce 2GW of modules this year. 

Maxeon is another significant partner for the tracker company. Recently, Array announced it would be paired with the 1.8 million modules that will comprise the 690MW Gemini solar project in Nevada.

With these factors in mind, ROTH reissued a “buy” rating, and set a price target of $25 per share.

ROTH noted some risks, including competition from incumbents and new entrants, new tracker technologies entering the market that may pose risks to Array’s centralized tracker systems, the rise of commodity prices squeezing margins, and weaker than expected global solar project policies.

Results

In the fourth quarter 2021, Array Technologies posted a revenue of $219.9 million, up from $180 million in the fourth quarter of 2022. Fourth quarter revenues for 2022 are estimated to be upwards of $290 million.

For the full year 2021, Array secured $853 million in revenues. This was a slight step down from 2020 revenues of $872 million; however, guidance is very strong for this year, with revenues expected to land around $1.5 billion for 2022.

The company executed a record $1.8 billion in contracts in 2021. Adjusted EBITDA was $43.2 million for the year, and an adjusted Basic and Diluted net income per share of $0.07.

“Despite a challenging 2021 it is important to re-iterate that the foundation of Array’s growth remains stronger than ever,” said Jim Fusaro, CEO. “This is most evident by the fact that we enter 2022 with $1.8 billion in executed contracts and awarded orders. To put that number in context, we have organically more than doubled the legacy Array portion from $705 million at December 31, 2020 to $1.4 billion at December 31, 2021… the legacy Array business alone is forecasted to grow at approximately 40% at our mid-point, despite the current module challenges and supply chain disruptions.”

Earlier this February, a new round of antidumping/anti-circumvention (AD/CVD) cases were filed against Malaysia, Thailand, and now Cambodia. A small US-based panel assembler, Auxin Solar, with about 120MW in development capacity in the US added its name to the petition, reviving what is viewed as a threat to solar development nationwide.

This comes just months after the Commerce Department tossed out an earlier similar request by an anonymous group of solar companies that sought tariffs on a handful of companies that import modules. About 80% of US crystalline-silicon modules are shipped from Vietnam, Malaysia, and Thailand. Auxin claims Chinese manufacturers are shipping cells to these countries to avoid paying tariffs that have been in place since 2012.

Under this case, all crystalline-silicon modules from each of the four countries could be subject to a tariff. Unlike the first case, this one is designed to be focused on entire countries, rather than specific companies. This new petition adds Cambodia, as Auxin claimed Chinese companies were moving operations to the country in anticipation of tariffs. Historically, Cambodia contributes less than 3% of all US C-Si module imports.

AD/CVD tariffs can be as high as 50-250%, a level of uncertainty that has shuddered through the US solar industry. “Deployment is frozen,” said George Hershman, CEO of SOLV Energy in an interview with pv magazine. SOLV is among the largest utility-scale solar contractors in the United States, with a strong project pipeline of over 4GW across the nation.

Hershman said the uncertainty caused by these tariffs is simply too much to digest in a utility-scale solar project, where module prices can account for 50% of the cost or more. SOLV‘s projects can exceed $300 million, so a 50-250% tariff would impose between $75 -$375 million in additional costs. This level of risk is untenable and is why Hershman describes the case as “an affront to the solar industry.”

The effects of US market uncertainty may already be showing, as LG announced it will close its solar module business and close its 550MW module assembly plant in Huntsville Alabama.

Clock is ticking

The petition was filed by Auxin on February 8th, and now the Department of Commerce has 45 days from the date to decide on the case. If passed, the AD/CVD tariffs would be retroactive to the case, levying huge tariffs on solar modules shipped from the four countries in the meantime.

“There is no case law to support this, it is a meritless case. It has been determined that the conversion of wafer to cell is the country of origin,” said Hershman.

Hershman is hopeful that Commerce will throw out the case, just like it did with the previous anonymous petition. His request: don’t wait the full 45 days.

With the nation targeting high decarbonization targets and the clock running, there is little time to pin the industry down with such uncertainty, he said. Based on supply chain constraints alone, Wood Mackenzie lowered its 2022 utility-scale solar projection by 33%, a steep drop of 7.5GW.

Industrial policy

In addition to this, Hershman is supportive of US manufacturing, but believes tariffs are the wrong pathway. “We need to align around legitimate industrial policy to support manufacturing in the US,” he said.

In Hershman’s view, tariffs like the ones imposed by the Auxin case are temporary, short-term measures that won’t boost US manufacturing in a meaningful way. Long-term certainty is needed for a company to move a fabrication process to a new country. He called for industrial policy like the Solar Energy Manufacturing for America Act, includes numerous tax credits for US-based manufacturing.

An earlier proposal of the Build Back Better Act included key industrial policy measures, before it was shut down by Sen. Joe Manchin (D-WV). The bill included targeted incentives for full domestic value chains, like solar module manufacturing and lithium battery recycling. Specifically, domestic production of PV modules would be incentivized at $0.07/W, cells at $0.04/W, PV wafers at $12/m², and polysilicon at $3.00/kg. Additional incentives were added for solar trackers, purlins, inverters from residential to utility-scale. Manchin said that he is once again open to talks but wants the conversation to start over “from scratch.”

Another round of anti-circumvention cases have been filed against Malaysia, Thailand, Vietnam, and now Cambodia, reports ROTH Capital Partners in an industry note. US-based panel assembler Auxin Solar added its name to the petition.

This comes just months after the Commerce Department tossed out an earlier similar request by an anonymous group of solar companies that sought tariffs on a handful of companies that import modules. About 80% of US crystalline-silicon modules are shipped from Vietnam, Malaysia, and Thailand. Auxin claims Chinese manufacturers are shipping cells to these countries to avoid paying tariffs that have been in place since 2012.

ROTH said under this case, all crystalline-silicon modules from each of the four countries could be subject to a tariff. Unlike the first case, this one is designed to be focused on entire countries, rather than specific companies. This new petition adds Cambodia, as Auxin claimed Chinese companies were moving operations to the country in anticipation of tariffs. Historically, Cambodia contributes less than 3% of all US C-Si module imports.

Thin-film modules are exempt in this petition. The ROTH note said the new filing “cures all the deficiencies” of the first anti-circumvention case. It said that this filing was a numerically based decision.

The note added that the Department of Commerce is expected to take on the case. The Biden administration may not have the same ability to block the tariffs as in Section 201, as there are procedures in place to prevent interference, it said.

Even if the case is denied, ROTH said there is significant risk of other strategies being taken by the petitioners. In a webinar, ROTH explained how the America COMPETES Act could be used in a similar fashion to achieve the group’s goals.

This latest filing may come as bad news for US utility-scale solar developers. The dismissal of the earlier anti-circumvention case was celebrated by Solar Energy Industries Association (SEIA), which vigorously opposed the 2021 request by American Solar Manufacturers Against Chinese Circumvention (A-SMACC) for anti-dumping and anti-circumvention tariffs. In a statement, SEIA president and CEO Abigail Ross Hopper called the decision to reject the petitions a “major victory for America’s 231,000 solar workers.”

The House of Representatives unanimously passed the Uyghur Forced Labor Prevention act. If enacted, the law would ban all imports from the Chinese region of Xinjiang unless the products are determined to not be connected to forced labor.

The region, which is home to 50% of the global supply of polysilicon, an essential material in conventional solar modules, has come under scrutiny for its human rights abuses and the forced labor of Uyghurs and other ethnic minorities in China.

White House press secretary Jen Psaki confirmed that President Biden will sign the bill, and Speaker Nancy Pelosi said the bill will be sent to the Senate for “swift action.”

In June, the Biden administration ordered a ban on U.S. imports from Xinjiang-based Hoshine Silicon Industry Co., as well as three other companies in the region, and banned exports to what it said is the paramilitary Xinjiang Production and Construction Corps (XPCC). Shortly thereafter the U.S. Department of Labor’s Bureau of International Labor Affairs took an unprecedented step by publishing a Federal Register Notice that targets polysilicon produced in the region.

“The world and the American people cannot abide the presence of goods made under the exploitative conditions experienced by Uyghur and other ethnic minority groups in its global supply chains,” said U.S. Secretary of Labor Marty Walsh. Corporations like Coca-Cola and Nike have lobbied against the new bill, which would have a major impact on supply chains that are deeply woven into China’s economy.

In August, an anonymous group of solar companies sought tariffs on a handful of companies that import modules from Malaysia, Thailand, and Vietnam. The group called for anti-dumping and anti-circumvention tariffs, pointing to uncertainty in the companies’ supply chain ties to China, and suspected dumping of forced-labor goods.

Solar industry leaders described the tariffs as potentially crippling. The Department of Commerce rejected the request in November, which Solar Energy Industries Association president and CEO Abigail Ross Hopper called “a major victory for America’s 231,000 solar workers.”

In 2020, the EIA reported U.S. imports of solar panels fell 27% in the third quarter, as tensions between Washington D.C. and Beijing rose.

U.S. manufacturing

With sanctions increasing internationally, the U.S. looks to bolster its own domestic supply chain as it pursues goals of decarbonizing energy.

The Senate Finance Committee released its draft of the Build Back Better (BBB) infrastructure bill, which includes incentives for the U.S. manufacture of thin-film PV and crystalline silicon PV. The bill also added incentives for U.S.-made solar trackers, inverters, and other renewable energy technologies. 

Simultaneously, Sen. Jon Ossoff (D-GA) sponsored a bill passed by the House in November that also pursues a boost in U.S. manufacturing. Similar to the BBB provisions, Solar Energy Manufacturing for America Act would offer tax credits for domestic manufacture of solar-grade polysilicon, wafers, cells, modules, as well as trackers and inverters.

With polysilicon largely sourced from the Xinjiang region, the U.S. is exploring other photovoltaics, like cadmium telluride (CdTe) thin-film panels, and Earth-abundant but relatively unstable perovskites.

Frank van Mierlo, the CEO of 1366 Technologies, is a betting man — and he’s wagering that “the solar market will see 2 GW of tandem solar in the marketplace by the end of 2022.”

I am the skeptic on the other side of this wager for one bottle of fine champagne — although I would accept a thimbleful of the CEO’s tears in its place.

van Mierlo, chief of a kerfless silicon wafer startup, has said: “I’ve never doubted silicon. We really believed in it. The learning curve had been holding steady for 45 years – it’s a pretty predicable line. Why would that stop?”

So, when we heard van Mierlo at a recent talk saying that tandem modules made from a high-bandgap and a low-bandgap material are “the most important innovation in solar since solar was first conceived in Bell Labs in 1954,” it seemed that 1366 was pivoting to a new technology and approach.

van Mierlo makes the case

When I asked van Mierlo about this seeming shift to tandem, and voiced my concern with this technology path, the CEO suggested we embark on a small wager about tandem’s commercial future.

He believes that the solar market will see 2 GW of tandem solar in the marketplace by the end of 2022.

van Mierlo writes, “In fact, not only do I believe that multiple gigawatts of tandem will be sold before the end of 2022, I am also confident that in a decade’s time, tandem will command more than 50% of our industry’s market share.”

He continues: “Is it that I no longer believe in the long-term role of silicon?”

“No! In fact, it’s the remarkable success of silicon that now makes tandem modules the inevitable next step. With its low bandgap of 1.1 eV and its low cost, silicon is the ideal candidate for the bottom cell in a tandem configuration. In this position, a silicon bottom cell converts less than one-third the energy captured by the sun but still carries 100% of the cell cost. To make tandem work, you need the bottom cell to be extremely low cost. And, thanks to recent innovations such as the Direct Wafer furnace, we can achieve that cost target.

“It is precisely because of silicon’s dramatic learning curve that tandem will soon be a commercial reality. As module costs have declined and many installation costs remain fixed, we’ve witnessed the increased pressure for greater efficiency. This pressure will drive tandem adoption: its dramatic efficiency boost without a significant increase in module cost-per-watt will lower the installed cost of solar by producing more power for a given area.

“We know that the headroom for increasing efficiency with single-junction silicon technology is closing. It is the opportune moment for tandem modules underpinned by extremely low-cost silicon.

“Which brings us to the tandem top cell, for which there are many excellent solutions. Thanks to the massive investment in thin film R&D, there are suitable materials already on the shelf. Moreover, new perovskites bring additional promise. Oxford PV and Swift Solar both vouch that it is possible to make a stable high-bandgap perovskite, but it is much harder for perovskites to match the excellent low-bandgap performance of silicon.

“Silicon’s next contribution will be to tandem as an extremely low-cost and high-performing bottom cell.”

“I am looking forward to drinking that champagne,” taunted the CEO.

Tandem solar startups

Since its founding, 1366’s technology has been based on forming solar wafers directly, using molten silicon, instead of silicon ingots sawn into wafers. Over the last 14 years, 1366 has raised more than $100 million from investors including Breakthrough Energy Ventures, Tokuyama, North Bridge, Polaris, VantagePoint, Energy Technology Ventures, Hanwha Chemical, Ventizz Capital and Haiyin Capital.

Tandem structures can be epitaxially grown monolithically on silicon or mechanically stacked. The tandem-junction cell architectures have potential efficiency gains because of the different wavelength ranges and bandgaps of silicon and other materials.

Tandem solar startups include:

• Oxford PV has raised more than $140 million to develop perovskite-on-silicon tandem solar cells and modules. Meyer Burger has partnered with the startup to develop equipment and has also taken an equity stake in the firm.
• Swift Solar stacks perovskite solar cells to make tandem cells. The company can put these layers on flexible substrates and foils.
• Tandem PV aims to monolithically print thin-film perovskites on a glass panel and mechanically stack it on top of silicon cells.
• Other perovskite solar technology developers include Saule Technology and HPT.

I win this bet

As we’ve reported, commercial crystalline silicon is forecast to reach efficiencies of 22%-24% by the end of the decade, and possibly 25% if interdigitated back-contact (IBC) heterojunction products get to market.

NREL studies find that reaching cost reductions in photovoltaics beyond the 6¢/kWh SunShot 2020 goal will mean that cell efficiency must be increased beyond the Shockley–Queisser limit of 29.4% for a single p-n junction. Other researchers have found that PV modules made with tandem solar cells will have to show efficiencies of 30% and offer the same lifetime and degradation rate as standard crystalline panels if manufacturers want to hit commercial production.

That said, I win this bet because:

1. Reliability: Silicon is the most studied element in the periodic table, and the globe will deploy more than 100 GW of the stuff in PV applications this year. We know its failure modes and its long term behavior. Other potential tandem materials such as perovskites or CIGS exhibit different and relatively unstudied failure modes and degradation paths. It will take years to gain confidence in the long-term reliability of a new materials system or tandem combination. Even if we understand each materials system separately — what happens when they are mingled in these 30-year assets in increasingly hostile environments?
2. Developers, banks, underwriters: A solar project is an investment tool that turns photons into kilowatt-hours and dollars — and the extremely risk-adverse financial community does not tolerate new, unproven technologies. Greater risk in any aspect of a solar project translates to nervous underwriters, a higher cost of capital and an uncompetitive project.
3. History is on my side: The road is littered with the remains of hundreds of solar aspirants, all keen to commercialize some alternative to straight-up crystalline silicon — amorphous silicon, CIGS, CdTe, or GaAs. Not one company, other than First Solar, has been able to succeed commercially in this effort.
4. Time is on my side: Yes, it is.

I will toast your health with my victory champagne in Dec 2022.

In what has been a turbulent and uncertain year, First Solar has posted another another impressive fiscal quarter, including the reinstatement of the company’s financial guidance for Q4 2020 and, by extension, full-year 2020 guidance.

First Solar was able to go beyond just weathering the economic and manufacturing slowdowns that came with the pandemic successfully, sharing that “the Company and its financial results have not been materially impacted by Covid-19.”

As for the financial highlights of the quarter:

• Net sales of $928 million, up from $642 million in Q2 2020 and $547 million in Q3 2019
• Net income per share of $1.45, a nearly 300% increase over Q2’s $0.35 and higher still over Q3 2019’s $0.29
• Net cash of $1.4 billion
• 1.6 GW DC of bookings since prior earnings call
• Strong fleet-wide capacity utilization averaging over 100% at all factories
• The aforementioned reinstatement of financial guidance for the fourth quarter 2020

Additionally, on the earnings report call, it was shared that the company has started production of a 445 W module, though no further details were given. The company also expects to see record efficiency in the near future, though it was not specified if that would be at the cell or module level.

Series 6

While not touched upon during the results call, First Solar made a significant accomplishment with the Series 6 module line during Q3, as the line was the world’s first PV product to be included in the launch of the EPEAT Photovoltaic and Inverters product category.

EPEAT is a life-cycle based Type-1 ecolabel used by public and private sector purchasers to allow for easy identification of credibly sustainable electronic products.

Series 6 was awarded an EPEAT Silver rating, based on criteria that look at the product’s life cycle, including managing substances in the product, manufacturing energy and water use, product packaging, end-of-life recycling, and overall corporate responsibility of the manufacturer.

To be the first PV product included in the new EPEAT PV Modules and Inverters category, First Solar Series 6 sustainability benefits were verified by a reputable third-party international certification firm. According to First Solar, the Series 6’s carbon footprint that is up to six times lower than comparable crystalline silicon PV panels, with its water footprint being up to 24 times lower.

Looking forward

After providing an outlook for the rest of 2020 in Q3, the First Solar has now provided one specifically for Q4 2020 and an overall update, which points to a successful close-out of 2020.

The company expects Q4 net sales of $540M to $790M, projecting for a full year mark between $2.6 and $2.9 billion. Earnings per share are expected to be between $1.00 and $1.50 on the quarter and $3.65 to $4.15 on the year. As for shipments, those are expected to be between 1.8 and 2.0 GW on the quarter and 5.5 to 5.7GW on the year.

Here’s a roundup of recent venture funding and project finance in solar, storage and beyond.

SOLshare, a Bangladesh-based off-grid solar company, closed $1.1 million in financing from IIX Impact Partners, a crowdfunding platform for impact investing, as well as innogy New Ventures – the VC arm of German utility innogy SE, and the investment arm of Portuguese utility EDP. The company aims to bring solar microgrids to off-grid, underserved communities in Bangladesh. More than half of Bangladesh’s population has no access to electricity.

SOLS Energy of Malaysia received an undisclosed amount of funding from Petronas Ventures. The company designs, distributes, installs and maintains solar systems for residential, and small and medium enterprise sectors in Malaysia. The startup has also received funding from 500 Startups. The CEO is Raj Ridvan.

Tax equity and securitization for solar is alive and well

Mosaic, a U.S. provider of financing for residential solar and energy-efficient home improvements, closed a $280 million securitization of residential solar loans. “Our ability to securitize solar loans in this challenged market environment is a vote of confidence in solar energy as an asset class,” said Billy Parish,  Mosaic’s CEO. The offering consists of four tranches of notes rated by Kroll Bond Rating Agency from “AA-” to “BB+” with weighted average lives ranging from 1.95 to 5.06 years. The notes are backed by $315 million of solar loans with a weighted average FICO score of 753.

Idemitsu Renewables, a utility-scale solar developer, closed tax equity financing for its 50 MW Central 40 solar project in Stanislaus County, California, and its 80 MW Pioneer Solar project in Adams County, Colorado. Both projects are under construction and will begin operating later this year. The tax equity syndicate was arranged by RBC Capital Markets. Pioneer will sell power to Intermountain Rural Electric Association, a nonprofit electric distribution cooperative in Colorado, and Central 40 will sell power to Silicon Valley Power.

Vivint Solar secured $300 million in new tax equity financing commitments. Vivint said the finance would help support the growth of its residential solar business, and the new money would finance around 185 MW of residential systems, equivalent to around 24,000 new customers. Vivint said the two deals satisfied its tax equity financing needs well into next year.

Energy storage

Orison, a Wyoming-based startup raised a $8.5 million seed round from investors including Australian electricity retailer Origin Energy. The company claims its batteries are designed to make energy storage accessible and affordable and allow “any energy consumer to self-install the system without utility approval or permits.” Origin plans to test and potentially deploy the energy storage solution later this year in the Australian market. According to uncritical reports at GTM, The energy monitor costs $300 and the battery system costs $2,200 for 1.8 kilowatts/2.2 kilowatt-hours — comparing unfavorably to Tesla’s Powerwall, which delivers 13.5 kilowatt-hours for $6,500.

Highview Power won a $12.5 million grant from the UK Department for Business, Energy & Industrial Strategy for a 50 MW/250+ MWh cryogenic energy storage facility. Javier Cavada, Highview CEO, said, “This new cryogenic energy storage plant will deliver much needed long-duration energy storage and provide valuable services to the National Grid.” Highview recently received $43.5 million from Sumitomo Heavy Industries. The facility will use existing substation and transmission infrastructure, with income derived from arbitrage, grid balancing, and ancillary services.

Investments in carbon sequestration 

Soil Carbon, an Australian startup looking to convert atmospheric CO2 into soil carbon, raised a $6.8 million seed round led by Horizons Ventures along with Grok Ventures, Clean Energy Finance and Lowercarbon Capital. “Microbe mediated carbon sequestration is one of the most important scientific endeavors of the 21st century. It promises an elegant solution for two of our greatest challenges today: the decrease of fertility and resilience in the world’s agricultural soils and climate change induced by the increase of CO2 in the atmosphere,” according to the company’s website. The company is developing a carbon-fixing endophytic fungus to sink carbon in soil. Here’s a video.

Carbon Clean Solutions Limited (CCSL), a UK-based startup focused on low-cost CO2 capture and separation technology, closed on a $22 million series B round from Equinor Ventures and ICOS Capital, joining WAVE Equity Partners, Chevron Technology Ventures, and Marubeni Corporation. The company is looking at CO2 capture technology for use across the steel, cement, waste management and refining & petrochemicals sectors. According to the company, its commercially available carbon capture process is applicable for industrial flue gases or off-gases with CO2 concentrations ranging from 3 to 25 vol.% and can achieve 90%+ capture rates.

Climeworks raised $75 million to pull CO2 out of the atmosphere last month, in a direct-air capture process where CO2 from fossil generators and industrial sources is captured, treated and injected into underground earth formations for permanent storage or for industrial use.

Chinese module giant JA Solar has announced plans to join the bevy of manufacturers launching 500 W-plus solar modules by claiming its high-power product has achieved an industry record output of 525 W under standard test conditions.

The manufacturer, however, did not confirm whether the 525 W figure had been independently verified, nor did it provide technical details for a product it says will be available in the second half.

“At JA Solar, we have been focused on technological innovation and committed to [providing] high-efficiency and reliable photovoltaic products for our global customers,” said CEO Jin Baofang. “Our value of [being] ‘customer centered’ has driven us to achieve this breakthrough, which enables us to win recognition from both the PV industry and our valued customers.”

The manufacturer last year announced plans to add 10 GW of new module manufacturing capacity at a cost of around RMB3.82 billion ($538 million).

Risen shipment

Shortly before the Covid-19 outbreak heralded widespread restrictions on PV production in China, Risen Energy had presented a new 500 Wp+ module series. Five months on, the company said it has shipped its first batch of the product. 

The manufacturer said 20 MW of high-power modules had left the factory gates at its headquarters in Ninghai, in Zhejiang province, on April 30. The modules are in transit to Malaysia where Tokai Engineering will be the first customer to unbox them.

Achieving power ratings of 500 W and beyond was largely made possible by a shift to larger cell dimensions from the standard, 156.75mm M2 layout to the G12 – initially named the M12 – wafer format, which measures 210mm by 210mm.

Larger wafers mean more significant power output, not least because the total power-producing surface area of the module can be increased. Risen touts a 20.8% module-level conversion efficiency for its 500 W product and claims the levelized cost of energy from its panels can be reduced 6%, and balance of system costs 9.6%.

SunPower, the high-efficiency solar module leader, announced that it is temporarily cutting executive pay, reducing the workweek for some employees, and that it has already idled its factories in the U.S., France, Malaysia, Mexico, and the Philippines in response to the impact of Covid-19.

SunPower’s Compensation Committee approved “additional temporary reductions in the base salaries of certain of its executive officers, superseding those previously approved and announced on March 25, 2020.” President Tom Werner and CEO Jeffrey Waters will be taking 50% paycuts and other senior staff will see a 35% reduction in their paychecks.

As we reported late last month, SunPower, already making an enormous corporate shift, announced steps it was taking to “help the company prudently manage its business during the current industry uncertainty relating to the Covid-19 pandemic.”

SunPower has more than 8,000 full-time employees worldwide, of which about 2,000 are in the U.S.

The company remains on track to complete its planned split into two independently focused pure-play solar companies by the end of the second quarter.

From pv magazine global

U.S. solar manufacturer First Solar today announced its manufacturing operations have not been affected by restrictions imposed by national and state governments to combat the spread of Covid-19 in the locations in which it has production lines.

However, use of the phrase “First Solar’s understanding” of the relevant orders illustrates the ambiguity related to the imposition of such measures in many locations around the globe.

While the Arizona-based manufacturer and project developer was clear in its statement that restrictions on movement imposed in Vietnam would not affect operations at its Ho Chi Minh City production line, it was less categorical about similar measures in Malaysia and in Ohio.

The company said today it understood its manufacturing sites at Perrysburg and Lake Township come under the category of essential businesses and operations which are exempted from the ‘stay at home’ order issued by the Ohio state government on Sunday.

Malaysia

Similarly, First Solar believes its production operation at Kulim in Malaysia is exempted from a widespread ban on public activity.

The U.S. manufacturer said it has taken measures at all of its sites – manufacturing, sales and administrative – to limit the spread of Covid-19.

With a nod to the fast-developing nature of the pandemic and the measures imposed to try and limit it, the company added: “First Solar cautions that the effects of the Covid-19 outbreak, including governmental efforts to contain the spread of the virus, are dynamic and subject to change at any time. This press release reflects information available to First Solar as of 8:15 a.m. (Eastern Time), on March 26, 2020.”

First Solar investors are still reeling from the announcement last month of a surprise $59 million loss in the final three months of last year and the decision of the board to consider selling off the company’s project development business to focus solely on manufacturing. Any hopes the company has of realizing value in its project business are likely to have been scuppered, at least for the time being, by the coronavirus crisis.

1366 Technologies, a Massachusetts firm in pursuit of low-cost silicon solar cells, just added $18 million in funding from Breakthrough Energy Ventures and other investors.

1366 was founded in 2008 and is one of the few VC-funded solar companies of that vintage to still be standing.

Over the years the company has raised more than $140 million from investors including Tokuyama, North Bridge, Polaris, VantagePoint, Energy Technology Ventures, Hanwha Chemical, Ventizz Capital and Haiyin Capital. 1366 has won several million dollars in DOE grants and has withdrawn from a $150 million loan guarantee offer from the DOE’s 1705 program.

The company’s technology falls in the kerfless wafer category, a technology of special interest to the DOE in days of yore.

Silicon goes kerfless

Kerfless wafer production does not require silicon ingots to be sawn into wafers, a time-consuming process which wastes material as silicon dust. Instead, 1366’s technology forms wafers directly, using molten silicon.

Startups such as Twin Creeks and SiGen attempted to manufacture kerfless silicon using ion-implantation. Crystal Solar and Ampulse were working gas-to-wafer technology. These companies have not succeeded, while 1366 is still around.

“I’ve never doubted silicon,” said Frank van Mierlo in an earlier interview. “We really believed in it. The learning curve had been holding steady for 45 years — it’s a pretty predicable line. Why would that stop?”

Low costs and big solar partners

1366 claims that its  technology is capable of achieving “a bottom up cost of just $0.19” per wafer with furnaces capable of producing multiple wafers at a time to drive the cost “below $0.15 per wafer piece.”

As pv magazine reported earlier this year, 1366 Technologies worked with Hanwha Q Cells and also partnered with German polysilicon manufacturer Wacker Chemie.

Van Mierlo has likened the 1366 innovation in silicon to the Bessemer process innovation at U.S. Steel or the use of float glass at Pilkington. He notes that the Bessemer process was the result of a decades-long innovation path.

VC-funded startups require exits

1366’s longevity and commercial success is rare in the world of solar industry hardware startups. The CEO’s “very deliberate route to high-volume production” is what kept the company alive for the last 12 years.

Despite 1366’s deliberate progress, venture capital investors typically have expectations of financial exits in the form of IPO or acquisition — particularly with long-in-the-tooth startups like 1366 Technologies. The addition of Breakthrough Energy Ventures, a venture firm with potentially longer time horizons, might change that exit math for 1366.

First Solar reported a bumper quarter during Q2 by most metrics. The company’s net sales of $585 million were nearly double the previous year, on shipments 1.4 GW of product – the most in its history. Additionally, First Solar booked more than 2.1 GW of orders in July alone, a very positive start to Q3.

First solar also reported a $8.6 million operating loss and a net loss of $19 million, which during the Q2 results call CEO Mark Widmar blamed mostly on “increased variable compensation expense associated with the company’s short-term and long-term incentive plans, and increased tax expense”. However, First Solar is predicting increased profitability as more plants come online.

Over the course of 2019 First Solar is estimating around $125 million in start-up and ramping expenses, as part of $650-$750 million in capital expenditures, and when most of this is over it should be enough to propel the company clearly into the black. Add to this higher volumes of production, marginally higher efficiencies and other factors, and First Solar is predicting that cost per watt for its Series 6 will fall 30% from Q1 to Q4.

And along with incremental improvement in its factories as they ramp, more production is coming. Following a fleet-wide retooling, First Solar is currently making product in four factories – its original factory in Perrysburg, Ohio, the massive Kulim plant in Malaysia, and twin factories in Vietnam. The company’s new 1.2 GW factory in Lake Township, Ohio saw tools installed in June, and First Solar expects the first production in 2020.

Even without the new Ohio factory, First Solar is expecting to ship 5.4 – 5.6 GW of modules over the course of 2019.

Competing with China

But First Solar’s race to reduce costs isn’t happening in a vacuum. The company broke with Solar Energy Industries Association (SEIA) in its stance over the Section 201 tariffs, as it struggles to compete with the ever-diminishing cost of imports from China.

Those imports got a big boost with the Trump Administration exempting bifacial modules from the Section tariffs in June, a move which Widmar said “introduces uncertainty” for First Solar.

It’s important to note that the disappointing decision which in our view has the effect of undermining the administration’s efforts to secure a level playing field for U.S. solar manufacturing introduces a new source of uncertainty going forward.

However, Widmar also says that he is happy with the company’s cost per watt reductions in the first half of the year, but that the company is still working on reducing costs during the second half of 2019. For this, Widmar notes that there is “no one silver bullet”, but also says that the company expects a significant reduction of labor costs once it no longer has to pay for the cost of fast production ramps.

However, Widmar has also stated that he expected to be able to ramp the new Ohio factory in a “environment that wouldn’t be under siege by a flood of imports”, which has now changed.

First Solar is still essentially sold out for the next two years, and still is in an enviable financial position, with a compelling product and significant economies of scale, which makes it one of the only U.S. module makers that has been able to hold out against the juggernaut of Chinese solar manufacturing. But it remains to be seen if those factors will be enough in late 2021 and 2022.

The retooling of a solar factory is not an easy or straightforward process, and a lot can go wrong when replacing tools and ramping production lines. This is especially true when you are retooling not just one but retooling and/or building five factories across the globe, and additionally dealing with the uneven timing of revenues that is inherent to large-scale project development.

These factors appeared to have been a perfect storm for First Solar in the first quarter of 2019. The company’s revenues fell 6% year-over-year to $532 million, and First Solar additionally dipped into the red with a $77 million operating loss and a net loss of $68 million.

Such losses are unusual for First Solar, even during its massive, multi-gigawatt retooling of factories as it moves from its legacy Series 4 to the larger Series 6. And First Solar seems to have seen this coming, with CEO Mark Widmar reminding those on the company’s Q1 results call that executives had previously stated that “timing of ramp and project charges as well as system sales would have the most acute impacts during the first quarter”.

EPC restructuring

Not all of the company’s difficulties were related to its retooling; First Solar also noted that revenues from its sale of projects which it develops and builds was down, which is not an unusual development given the bumpy quarter-to-quarter nature of project development.

However, on the call First Solar also revealed multiple issues with its engineering, procurement and construction (EPC) business. CEO Mark Widmar reported difficulties in keeping costs down in its EPC business, some of which was related to labor shortages – something that we are likely to see more of as the labor market struggles to keep up with the coming boom in large-scale solar – and weather delays.

But Widmar also stated that the division’s recent record of cost management “failed to meet our expectations”, and heads are rolling. First Solar says that it will restructure the EPC division, including replacing its leadership and reviewing some of its sub-contractor relationships.

Ramp ongoing

But as First Solar revamps its EPC division, more and mores of its Series 6 capacity is coming online. During Q1 First Solar began ramping its second factory in Vietnam, which is the fifth factory to begin making the large-format modules.

First Solar already has a fairly significant capacity of Series 6 humming, and managed to produce 900 MW of modules during the first quarter, about half of which was its legacy S4 and half was S6.

As it ramps its new factories, First Solar says that it is learning from its previous ramps, and is reaching higher capacity utilizations faster, but there is still inevitable downtime as the new machines come online and are tuned.

And it is not just output that is benefitting; First Solar notes that in just two months it is seeing 6 watts of additional power per module in its S6 production, supported by a higher portion of anti-reflective coating usage. Due in large part to its larger format the S6 was already a powerhouse, and the company’s current data sheet shows modules with power ratings up to 445 watts.

Sold out into 2021

But perhaps the best measure of First Solar’s solid position is that its products are sold out for the foreseeable future. The company currently reports 12.2 GW of booked modules, and estimates that given the current schedule of factories that it expects to come online that it is sold out 1/3 of the way through 2021.

First Solar also upped its guidance for 2019, and is now expecting $3.5-$3.7 billion in annual revenues; the company’s expected shipments of 5.4-5.6 GW remains unchanged. This means stepping up to an average of 1.5 GW shipped each quarter for the remainder of the year, and First Solar notes that fleet efficiency, throughput, yield and cost are improving.

By 2021, the company expects to be producing 6.5 GW of solar per year, as the only thin-film company that has remained among the world’s largest PV makers. So while Q1 was bumpy, First Solar appears to still have a strong future ahead of it.

Making high-efficiency solar at scale is a hard game, a game that has bested more than a fair share of companies. And while SunPower has managed to scale to one of the world’s largest PV makers on the back on of its Maxeon Interdigitated Back Contact (IBC) solar cells – the highest-efficiency solar products available on the mass market – the company has struggled for years to gain profitability.

Today, SunPower took a major step towards reimagining its business with the launch of its A-Series PV modules, the first product to incorporate its New Generation Technology (NGT) cells in the U.S. market.

Like Maxeon, NGT is a IBC product, with layers of copper and aluminum that extract electricity off the back of the cell, and no gridlines or busbars on the front. And like SunPower’s X-Series and E-Series, the A-Series panels offer very high efficiencies, from 21.5-22.3% at the module level.

This is still higher than any other mass-market solar manufacturer, including SunPower’s biggest competitor in the U.S. market, LG Solar – even when accounting for LG’s new NeON R product, which also uses IBC cells.

Cost war

But not only is NGT based on much larger 6” wafers – a development that is likely the result of ongoing advances in monocrystalline ingot casting in China – but SunPower says it uses a less expensive manufacturing process. The company has consistently declined to offer details on how much NGT reduces costs, but CEO Tom Werner has stated that through manufacturing efficiencies and higher throughput NGT will be on par with mono-PERC technology.

That’s the right benchmark to be aiming for. Driven by the rise of massive mono ingot and wafer factories owned by LONGi and Zhonghuan and the spread of PERC cell technology, mono-PERC products is coming to dominate not only the rooftop but also the utility-scale market, and both Jinko and Hanwha’s new U.S. factories are making mono-PERC products.

And these two factories would have a price advantage against SunPower’s imported products in the U.S. market, were it not for the exemption from tariffs that SunPower has secured. As such, SunPower actually has an advantage here, as both Jinko, Hanwha and nearly all other companies with PV module factories in the United States must still pay the Section 201 tariffs on the cells they import.

Over 400 watts

Not only is SunPower’s A-Series based on larger wafers, but the overall module is 10% longer than the X-Series or E-Series modules, at 40” x 72.2” (the company says that the weight is similar). This allows SunPower to produce the first over 400 watt module for the rooftop market, with A-Series products coming in at 400 and 415 watts.

SunPower says that it expects to ship up to 100 MW of A-Series modules this year, and to reach 250 MW of annual manufacturing capacity by year’s end. By the time it completely converts its Fab 3 in Malaysia to NGT, it will have 800 MW of capacity, some of which is enabled by higher throughput in the NGT process.

It remains to be seen if this will allow SunPower to turn to profitability. The company has taken all the right steps, both in lowering the cost of its products and shifting to focus on rooftop solar markets where the advantages of its high-efficiency products are the greatest, and has had to pay for these investments. Now we will see if all of this work pays off in dollars and cents.

U.S. based wafer maker 1366 Technologies and Hanwha Q Cells’ Malaysian unit have announced construction of their wafer manufacturing facility in Cyberjaya, in the Sepang district of Selangor, is close to completion.

The Direct Wafer Factory, the U.S. company said, was built near Hanwha’s existing cell and module factory in Malaysia to facilitate direct wafer delivery to the Korean manufacturer, which has a 700 MW supply agreement with strategic partner 1366 Technologies.

“The Direct Wafer Factory is expected to ramp no later than Q3 2019 and – provided that the initial footprint meets key performance criteria – has the potential to become the cornerstone for a multi-gigatt scale production facility,” the U.S. wafer maker announced.

Hanwha Q Cells chief technology officer Ji Weon Jeong said: “In line with this commitment to customer value, Direct Wafer technology will innovate the manufacturing process and, as a result, the quality of the products manufactured.”

The promise of kerfless wafering

In March, 1366 Technologies said it was abandoning plans to build a wafer manufacturing facility in New York and would construct its first commercial-scale wafer factory at an undisclosed overseas location. As part of the change in strategy, the company had withdrawn from the loan guarantee process of the U.S. Department of Energy without having received funds.

Promising to bring kerfless wafer technology to mass production, 1366 Technologies’ Direct Wafer technique has long held big hopes for the industry. The company currently operates a demonstration facility in Bedford, Massachusetts, where most of its technological developments were achieved. One such was the 20.3% cell efficiency reached in August 2017 in a Q Cells Q.ANTUM cell, incorporating passivated emitter rear contact (PERC) technology and 1366 Technologies wafers. That record, 1366 Technologies said at the time, was achieved on a pilot line using standard processes seen in mass production.

Price reduction

The Bedford-based company said the new manufacturing facility could lead to the production of wafers for less than $0.20 per piece, and its Direct Wafer process enables the production of thinner 3D wafers by reducing the amount of silicon used to less than 1.5 g/W without compromising quality. The company said its production process has other advantages, such as a high-purity growth environment, better microstructure and the ability to grade doping agents across the wafer.

Kerfless wafer production does not require silicon ingots to be sawn into wafers, a time-consuming process which wastes up to 44% of the material which becomes silicon dust. 1366’s kerfless technology forms wafers directly, using molten silicon.

1366 is also partnering with German polysilicon manufacturer Wacker Chemie.

There are those who say that given the ongoing ability of Chinese manufacturers to keep cutting costs for crystalline silicon, that no other technology can really compete in the long run. But if there is an end in sight for First Solar, it didn’t show in the company’s Q4 and full year 2018 results.

Instead, First Solar appears to be on top of its game and has completed the bulk of its transition to the new, large-format Series 6, with its second factory in Vietnam coming online in the first two months of 2019, to add to its factories in Ohio and Malaysia.

This year the company expects to ship around 5.5 GW of PV modules. Even at this volume CEO Mark Widmar estimates that the company is “fully sold out” through the end of 2020 and First Solar’s current 12 GW of bookings includes shipments scheduled through 2023.

The company shipped 900 MW of product during Q4 of 2018, and while it did not break that down between its Series 4 and Series 6, what is clear is that Series 6 is currently being used almost entirely for projects that First Solar develops and builds.

First Solar’s revenues and profitability were also not bad for a company that is still retooling; it brought in $691 million during Q4, and managed to eke out a slim 1.6% operating margin and a net income of $52 million.

Over the course of 2018 the company’s revenue and profitability was similar, and First Solar burned through around $440 million of its war chest during the year, retaining a healthy $2.5 billion in cash and equivalents at the end of 2018.

As the company moves into 2019 it expects shipments to pick up as more factories ramp. First Solar’s new 1.2 GW factory in Ohio is not set to come online until the end of the year, and when it does this will put First Solar at over 7 GW of annual capacity, as one of the largest PV makers on the planet.

This will also give First Solar the ability to support more third-party sales of the Series 6, and the company expects 45% of Series 6 shipments to go to third parties by the fourth quarter of 2019.

First Solar also sees per-unit costs continue to fall with the ramping of its factories, as well as efficiency gains. The company’s Series 6 is already offered with ratings as high as 445 watts, and it notes that the average watts per module rose by 10 from October 2018 to February 2019.

Despite all of this First Solar did appear to miss its Q4 2018 guidance, and the company also lowered its 2019 margin guidance slightly, with what Widmar describes as “minor adjustments to ramp and start-up costs”.

However, First Solar still expects to bring in $3.25 to $3.45 billion in 2019, with positive margins and a net cash balance – despite $110-$130 million in production start-up and ramping costs.

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Over the past two years, First Solar has taken on the biggest change of its decades as a  solar manufacturer: the re-tooling of its factories to make its large-format Series 6 modules. And if Q2 was the nadir of this process, with several factories either retooling or under construction and losses based on limited sales, the company’s Q3 results sees First Solar successful executing on the ramping of the Series 6, and a return to profitability.

Earlier this month First Solar began commercial production of its Series 6 at the first of its twin factories in Vietnam, which follows on the start of production in its legacy Ohio factory as well as in Kulim, Malaysia earlier this year. The Vietnam factory is already up to 35% throughput, with Malaysia producing at 75% and the Perrysburg, Ohio factory rising to 90%.

And there is plenty of demand for this output. First Solar signed contracts to deliver an additional 1.1 GW-DC of modules since its last earnings call, bringing its bookings to a massive 11.3 GW. While meeting this demand will depend on the timing of ramping production, First Solar CEO Mark Widmar estimates that the company is sold out through 2020.

And as First Solar gets more modules produced and shipped, revenues are coming back. During Q3 revenues more than doubled to $676 million, and more centrally the company’s operating margin came back from the red to 8.7%.

Looking forward First Solar is ahead of schedule with getting production online, and says that due to faster than expected progress at the second Vietnam factory it will begin production in the first quarter of 2019, instead of the second quarter.

CEO Widmar also notes that construction of the company’s new 1.2 GW factory in Ohio is proceeding on schedule. In 2020 when all factories are completed and ramped the company expects to have 7.6 GW of annual manufacturing capacity.

Competition

First Solar’s success in ramping comes as PV module prices are collapsing both globally and in the United States due to a global oversupply resulting from Chines policy changes. The company claims to have very low costs for S6 in greenfield factories, in part due to improved efficiency in recent years, but no PV manufacturer is unaffected by price dynamics.

“I understand pricing in some markets is very aggressive,” admitted CEO Widmar. However, he remained positive and referenced the company’s enormous and growing backlog. “We’re booking good economics with good customers,” stated Widmar.

This does not mean that some deals don’t fall through. Widmar referenced a situation where one Chinese customer cancelled its purchase, forfeiting a 20% deposit, and he clarified that the company will enforce its contractual rights.

At the end of the day First Solar’s massive backlog leaves room for some cancellation. Nor is this backlog coming from captive projects, as in previous years. Widmar estimates that 80% of First Solar’s current backlog comes from module sales, not projects that the company is developing.

In fact, going forward First Solar expects its systems business to total only 1 GW annually. But this does not mean that the company is not involved after the modules are shipped. Widmar noted a 650 MW module deal with Tampa Electric that expanded to a engineering, procurement and construction (EPC) agreement, and First Solar will also provide operations and maintenance services on the projects that it will construct.

On a similar vein, First Solar is providing EPC services on a 200 MW-AC solar project that it recently sold to Origis Energy in Georgia, which represents the 2nd-largest solar project in the U.S. South.

First Solar still sees much of its opportunities in the U.S. market, and referenced the South and Mid-Atlantic on the call. With the recent 500 MW RFP for wind and solar in Virginia and ongoing opportunities in several other states in the South, it appears that this region will be important for many manufacturers, including First Solar.

The company brought down its guidance slightly due to timing of project completion, but still expects $2.3 – $2.4 billion in 2018 revenues, and a total operating margin in the 4-5% range, while shipping 2.6-2.7 GW of modules.

In the year 2018, the solar technology of previous years is not good enough. Just as First Solar has undergone a massive retooling to move to its larger-format Series 6, SunPower is also preparing for a major shift in technology to its new NGT technology, as revealed in today’s second quarter 2018 results call.

The call also saw some of the only details that SunPower has released on its NGT technology to date. Like its current Maxeon solar cells, NGT will be based on interdigitated back contact (IBC) technology, but using larger-format 6” wafers.

SunPower will also make NGT at existing factories, instead of new fabs, and announced that it plans to entirely convert its current 800 MW of E-Series cell and module production to NGT. SunPower CEO Tom Werner says that NGT is “ahead of plan” and that the company has already produced the first silicon on a new line at its Fab 3 in the Malaysia.

The company expects to begin volume production of NGT in the fourth quarter of this year, and states that the new product will substantially reduce the cost of its products, noting a simplified process with fewer tools and higher capacity.

“When fully ramped, we believe that NGT cost per watt will be on par with mono-PERC technology,” stated Werner on the company’s results call.

At the same time SunPower reports very high efficiencies similar to its Maxeon products, projecting that modules using its NGT cells will offer greater than 23% efficiency. Any wattage gains will be mostly due to larger wafers, however Tom Werner told pv magazine that there are “some subtle changes to get the efficiency up due to the geometry on the back side of the cell.”

SunPower has not yet released information on the format of the modules that will be made with NGT cells, but Tom Werner says that there may be a slightly larger format, in line with existing trends.

Werner also stated that the company has not yet made a decision as to whether or when it will switch over its 400 MW of X Series production to NGT, given that its Fab 4 in the Philippines is only two years old.

Cash ins and outs

The decision to phase out its E-Series was not kind to SunPower’s Q2 results. The company wrote down $369 million of its legacy manufacturing equipment, the largest factor in the company’s stunning second quarter loss of $447 million, which nearly equalled its revenue of $449 million for the quarter. Additionally, SunPower reported a sizable $68 million in impairment of impairment of its lease assets, and when these two are taken out the company pretty much broke even.

However SunPower has also been paying off its debt. The result that its balance sheet shows less than $300 million in cash, and the company is furiously selling off the parts of its business deemed non-essential. This has included the sale of its partial ownership stake in yieldco 8point3 Energy Partners and its microinverter technology, and now SunPower expects to monetize the first phase of its lease portfolio, and by the end of the year the company expects to sell 400 MW of residential lease assets.

Even with this, it is not clear how SunPower is going to pay for a massive retooling and the acquisition of a factory.

The good news is that the company expects much lower retooling cost thanks to reusing its existing factories as opposed to making NGT in greenfield factories. This does not mean that the cost will not be significant; and CEO Werner estimates a cost of $0.30 per watt to retool its Fab 3 to make NGT, meaning a total cost of around $400 million given the higher capacity after the switch to NGT. The company plans to fund this at least in part through customer advances and partnerships, and reports that it has several in the works.

Additionally, there is the substantial matter of the pending acquisition of SolarWorld’s Oregon factory, which SunPower also plans to fund without new capital raises, and here the sale of assets could prove critical. Retooling at the SolarWorld factory is expected to be much less costly, as the company plans to use SolarWorld’s cell production, and the biggest change will be moving module production to P-Series.

But in the larger picture is that SunPower may not have much of a choice. Like all other PV makers it is in danger from the falling prices for solar due to global oversupply stemming from Chinese policy changes, and it is additionally staring down an estimated $51 million in tariffs on its products during the second half of this year alone.

SunPower has a choice to go big or go home, and it is choosing the former.

Correction: This article was corrected on November 14, 2018 at 11:00 AM EST. An earlier version of this article stated that the cost to retool Fab 3 would be over $1 billion, but the figure is actually around $400 million. We have changed the figure in question, and regret the error.

When it took on retooling for its large-format Series 6 (S6) product, First Solar was in a very strong position. The company was perhaps the most profitable large solar manufacturer in the solar industry, and was sitting on more than $1.6 billion in cash.

A year and a half later First Solar is in the weeds of the transition to S6 and is seeing challenges from the difficulties of ramping new production, as well as longer-term concerns due to collapsed module prices resulting from changes in Chinese solar policy and resulting global overcapacity.

The company’s second quarter results are likely to be its low point, with revenues of only $309 million, a 50% fall from a year ago, and an operating loss of $104 million. With $40 million coming in during the second quarter from the sale of yieldco 8point3, the company reported a net loss of only $48.5 million.

First Solar is currently ramping production of S6 at both its Perrysburg, Ohio factory as well as its Malaysia factory. However, on its quarterly results call First Solar reported problems with production on the back end of the certain lines, stating that lines were not adequately buffered.

The company says that it has fixed this with adding redundancies in certain places on its lines and expects to be at the same run rate as previously predicted by the end of the year, but this has still caused a reduction in its expected 2018 production by 200 MW.

This in turn has caused delays in supplying modules to projects including the California Flats PV plant, where First Solar is installing the S6 product, and is expected to affect the timing of revenue recognition on projects.

But while there have been hiccups in terms of throughput, the S6 modules that are rolling off the line appear to be living up to expectations. First Solar reports an average capacity of 415 watts for the product – only 5 watts short of the company’s goal – and S6 has received its UL and IEC certifications.

Module prices and bookings

First Solar’s larger problem may not be manufacturing, but rather the market. In opening the call, First Solar CEO immediately referenced the “almost immediate collapse in pricing along the crystalline silicon value chain” starting in late Q2, stating that he expects more competitive PV prices and industry consolidation.

First Solar is bullish on the ability of S6 to compete even in this environment, noting the balance of systems advantage of its large format and the superior high-temperature and low-light performance of cadmium telluride versus crystalline silicon.

While the company’s bookings slowed to 900 MW during Q2, First Solar reports 400 MW of bookings in July already, which is a strong start to Q3. The company also reported success with its development business, including acquiring a portfolio of new projects in the Southeastern United States.

With 10.9 GW of current bookings, First Solar estimates that it is 80% booked through the end of 2020, which provides a degree of security for its ongoing expansion.

And First Solar has not stopped growing. Six weeks ago the company broke ground on a new 1.2 GW factory in Ohio, and in addition to its existing Ohio and Malaysia factories is outfitting twin 1.2 GW factories in Vietnam, the first of which is expected to produce its first S6 modules at the end of Q3.

Backing this up is one of the largest war chests of any PV maker, with over $3 billion in cash and marketable securities. So while First Solar may face headwinds from falling module prices, CEO Mark Widmar’s statement that “we have never been better positioned to weather the current near-term challenges” is not hyperbole.

The contract, worth around $600 million, was signed on July 17 with an un-named U.S. “major ground power plant developer”. Under the terms, monocrystalline modules will be shipped over a four-year period, between 2019 and 2022.

The Chinese PV manufacturer’s wholly-owned subsidiary Longi Leye Photovoltaic Technology Co. Ltd. will supply the modules.

“This contract is a major sales contract, and the signing of this contract is beneficial to LONGi,” said the company in a filing to the Shanghai Stock Exchange.

According to LONGi’s website, the company currently has a module manufacturing capacity of 6.5 GW. Despite the changes to China’s PV policy, the company will progress as planned with its investment in a $300 million 5 GW PV module plant, and a tripling of wafer capacity to 45 GW by 2020, Mr. Zhen Guo Li, General Manager, Director told pv magazine at last month’s Intersolar Europe/Smarter E event in Munich, Germany.

He added that while LONGi’s overseas module sales accounted for just 10% in 2017, this figure will grow to 30% this year, and is expected to expand to over 50% by 2020.

In addition to manufacturing in Malaysia, at the Samajaya Free Industrial Zone (SFIZ) in Kuching – established in 2016 – LONGi announced this year that it will set up shop in Gujarat, India, with 1 GW of cells and modules, respectively.

It was unclear at the time of publication whether the modules will be manufactured in China, Malaysia or India, and what duties they will be subject to.

Construction on the module factory is underway, with production expected to commence by the end of August 2019. Meanwhile, the cell factory is set to start production in January 2020 – a year later than originally planned, due to the increased capacity.

Correction: This article was modified on July 19 to remove a reference to where the modules will be made.

With the global crystalline silicon cell and module industry centered in Asia, for many years U.S. ingot and wafer production has been a hard sell. Last September Panasonic Eco Solutions announced that it would close one of the last silicon ingot and wafer facilities in the United States in Salem, Oregon, and now the factory is going on the auction lot.

GA Global Partners is now holding an auction for the whole kit and caboodle. It was unclear at the time this article was published whether or not the factory and its equipment would be sold off as a single unit, or piece by piece, but either way the auction will be held on May 9 at 10 AM Pacific Time (U.S.).

The factory formerly supplied wafers to Panasonic’s solar cell operations in Malaysia and Japan. Panasonic officials state that the facility closed due to declining demand in the Japanese residential market, and despite all of the rhetoric around U.S. manufacturing this appears to have had nothing to do with trade war between the United States and China.

Nor does it appear to reflect much on Panasonic’s overall operations within the United States. A separate company within Panasonic’s Eco Solutions business is continuing to ramp production of cells, modules and the Solar Roof product for the U.S. market at the Tesla/Panasonic “Gigafactory” in Upstate New York.

Of all the companies involved in fight over the recently imposed Section 201 tariffs on PV modules, none has been as deeply involved or as affected by its outcome as SunPower. The PV cell and module maker offers the highest-efficiency solar panels on the market, but also some of the most expensive, and as such its products are hit more heavily by the ad valorem nature of the 30% tariffs on imports.

SunPower manufactures these products in the Philippines, Malaysia and Mexico, but besides a small pilot line in Silicon Valley, the company has no U.S manufacturing. This means that while much of the rhetoric of the Section 201 trade case was focused on the role of Chinese companies in undercutting prices, that the wide net cast by the global nature of the tariffs also caught SunPower.

With SunPower VP of Market Strategy and Policy Tom Starrs serving as chair of Solar Energy Industries Association (SEIA), the company has also led the fight against the 201 tariffs, but has also prioritized exempting its own products. And today the company filed its long-anticipated request for a formal exemption from the duties for its Interdigiated Back Contact (IBC) solar cells and modules made from these cells, through a process announced by the U.S. Trade Representative last month.

SunPower’s filing repeats many of the same arguments that is has made in the past as to why its particular products should not be subject to duties, including that the high-efficiency nature of IBC cells makes them unlike other solar products including low-cost crystalline silicon imports from China.

However, the company also lays out a case regarding U.S. employment that strikes to the heart of economic nationalist arguments about U.S. manufacturing and the complicated circumstances of global trade in high technology.

SunPower argues that even while it does not manufacture its primary products in the United States, that it secures high-quality polysilicon from U.S. producers, that the specialized, expensive equipment that its cells and modules are produced on are made in the United States, and that its specialized products are the product of “substantial domestic investment in research and development”.

The company goes further than that. From the filing:

copper-plated IBC technology was conceived and developed in the U.S., by engineers, scientists and technologists employed by an American company. The patented technology and manufacturing processes associated with it are American assets. Restricting the availability of this technology and know-how in the U.S. and curtailing domestic investment in research and development by failing to exclude solar cells and solar modules based on copper-plated, IBC technology will create a vacuum for foreign-owned companies, with intellectual property developed overseas, to fill.

For a long time, what SunPower is claiming was broadly true of much of the industry. Before China slapped retaliatory tariffs on U.S. polysilicon, companies such as Hemlock Semiconductor and REC Silicon were supplying poly to Chinese PV makers, to make solar cells and modules on equipment often made by U.S. or European tool makers.

However, as time goes on China is capturing not only the bulk of cell and module production, but Chinese companies are learning to make high-quality polysilicon – often with technology from U.S. companies – as well as tools.

Much of this is done through joint venture agreements with Western companies, such as the joint venture that SunPower holds with Zhonghuan Semiconductor for its massive P-Series module factory in China.  However, SunPower now states that if it could get an exemption for its IBC products, it would be able to manufacture the P-Series in the United States.

Per SunPower’s filing:

…an exclusion for both our Copper-Plated IBC Cells and Copper-Plated Modules would free SunPower to devote substantial resources that otherwise would be dedicated to satisfying its additional customs duty liability to investments in next-generation research and development in the United States, as well as the establishment of U.S. manufacturing facilities dedicated to SunPower’s P-Series modules, for which an exclusion is not being requested.

This would be a new move for SunPower, which maintains only pilot lines in the United States. SunPower CEO Tom Werner has told pv magazine that his company’s interest in U.S. manufacturing was “catalyzed” by the Section 201 process.

“The tariffs certainly were a motivator in our thinking that its highly likely we’ll pursue manufacturing our P-Series in the U.S.,” stated Werner. “We’ve been looking at a U.S. manufacturing option for a while and have narrowed down sites to two.”

However, the odds of whether the U.S. Trade Representative will grant an exemption to SunPower, or to any manufacturer, are unknown. Last Friday’s deadline for filing exemptions now begins a 30-day public comment period.

Inherent in the justification for the United States’ Section 201 process is the desire to preserve sections of American manufacturing that are under threat from being wiped out by imports. But for the petitioners in the recently resolved case on solar products and their supporters, there was more than this. For years, SolarWorld in particular has spoken of a vision of creating a renaissance in U.S. cell and module production, rebuilding a sector that was decimated years ago.

Now that tariffs have been imposed, expected impacts on the downstream market have been clearly articulated by GTM Research, IHS Markit, and others, including a warning by the Solar Energy Industries Association (SEIA) that this will cost 23,000 jobs. But instead of these precise predictions, the question of whether or not these import duties will stimulate American manufacturing and bring back the cell and module sector has been largely dismissed out of hand.

Recent developments suggest that such a prognosis is premature. In recent months, pv magazine has reported on a number of companies that are either expanding their U.S. manufacturing, hiring within the nation, or planning to relocate factories there. As such, it is not a question of whether or not the tariffs will stimulate U.S. manufacturing, but instead the degree to which they will do so, and how long any effects will last.

State of the industry

To answer these questions, it is necessary to look at the current state of U.S. solar manufacturing. Contrary to claims made by SEIA, Energy Trade Action Coalition, and others, there is ample evidence that the failure of many companies in this sector since 2011 has been due to the widespread inability to compete with low-cost imports, starting with a wave of imports from China around 2011 and in later years from other Asian nations.

The United States currently meets only a small portion of its annual demand with domestic content, and current U.S. module capacity is only around 20% of the anticipated market this year. At least until Tesla’s Gigafactory is fully operational, there are only two domestic cell and module makers with the capacity to produce more than 500 MW of modules each year – First Solar and SolarWorld.

pv magazine has also identified 14 companies that make modules in the United States, but not cells. We did not find any with the capacity to produce more than 200 MW of modules annually, and all are dependent upon merchant cell supply. Incidentally, the last domestic merchant cell maker was Suniva.

Edurne Zoco, Research Director for Solar and Energy Storage at IHS Markit, says one factor in this imbalance between cell and module capacity was the 2014 Department of Commerce ruling imposing antidumping duties (ADD) and countervailing duties (CVD) on products from China and Taiwan.

“Since the ADD/CVD only impacted Chinese and Taiwanese cells, they could source cells from other markets (e.g. South Korea), do the assembly in the United States, and bypass the ADD/CVD,” Zoco tells pv magazine.

“These modules have higher ASP and serve the relatively higher price segment in the United States: residential and small commercial, which is limited. It was the fastest and cheapest solution to serve the local market. By contrast, building cell lines takes longer and it is much more capital intensive, and therefore more risky for any company.”

Cells and modules

Given the lack of domestic cell manufacturing, the Section 201 remedies proposed by Suniva and SolarWorld would have created a bottleneck in terms of cell supply, and put these smaller U.S. module makers in a compromised position.

However, it didn’t pan out that way. The Trump Administration gave an exemption for 2.5 GW of cells each year. This ensures that these module makers will not have to pay tariffs on imported cells for the foreseeable future, as this far exceeds their current total capacity.

This shifts the entire cell and module production situation under the tariffs. Not just SolarWorld and First Solar, but all module makers with U.S. factories will enjoy a competitive edge against imports. Furthermore, these module factories will not be dependent upon Suniva’s lines for a limited volume of tariff-free cells.

However, U.S.-based module manufacturers will still not be able to supply more than a fraction of domestic demand, and even under the forecasts of contraction within the U.S. market published by analysts including GTM Research and IHS Markit, imports will still account for the large majority of modules installed, at least for the next few years.

Spurring manufacturing?

Due to the 2.5 GW exemption for imported cells, there is no more reason to install cell lines in the U.S. than there was before the Section 201 process. From pv magazine’s conversations with analysts, widespread installation of cell lines was doubtful anyway given the larger capital investments and longer lead times required. Additionally, the lack of local supply chains to support cell production further discouraged such a move.

Therefore, the question becomes whether or not U.S. module capacities will expand, and this is more complicated. It can be argued that this is happening already. Over the course of the last two months Solaria and SolarTech Universal have both announced capacity expansions. Mission Solar Energy has also revealed that it will hire 50 workers to bring its module lines back to 24/7 production, as the first step before an undefined future expansion.

Additionally, there is “Project Volt,” where a major global PV maker is looking to locate a $410 million solar factory in Jacksonville, Florida. Based on inside sources and additional evidence, we believe Jinko Solar is the company behind Project Volt. And finally, United Renewable Energy, a partnership between three of Taiwan’s biggest cell makers, has announced plans to establish a U.S. module factory.

Despite these announcements, Edurne Zoco says that the business fundamentals also do not support moving module manufacturing to the United States. Among other details, she cites uncertainty around how the 2.5 GW of tariff-free cell imports would be allocated, noting that in order to build a business case for module assembly it will be essential to secure a supply of cells.

State-level support

However, Zoco makes an exception for what she calls “political factors,” which include state and local subsidies; relationships between large utilities, developers and suppliers; and international developers with local project pipelines that they are trying to build out.

The availability of state-level and local policy support may end up being the defining factor in whether or not any particular factory gets built. As such, support has been widely utilized in all of the recent U.S. cell and module production sites that have come online.

In particular, Tesla/Panasonic’s solar gigafactory in Upstate New York was not only highly subsidized, but the building itself is owned by a non-profit associated with the State University of New York, and only leased by Tesla. Similarly, when thin film maker Stion set up shop in Mississippi it also received heavy subsidies from the state, including a loan that the state is trying to recover now that the factory is closed.

Shortly before this article was written, Jacksonville City Council had just approved $23 million in incentives for Jinko Solar, as the first phase of a $54 million package that will include state grants for hiring veterans.

Modest growth

In the end, the Section 201 tariffs may end up helping to modestly expand U.S. module assembly. But although it is hard to tell the exact volume at this time, they are unlikely to spur a renaissance in U.S. solar manufacturing.

To understand why, it is necessary to look beyond the solar industry. In the last decades of the 20th Century, U.S. manufacturing employment plummeted as factories moved overseas. In the early 1990s the nation’s trade deficit in goods spiraled above $100 billion annually, and reached a high of $828 billion in 2006 – more than $2,500 for every American.

China, which was for many years our primary trading partner and trade war opponent, has articulated and pursued a comprehensive, long-term approach to supporting its solar manufacturing. PV makers are supported at every level of government, including the supply of massive lines of credit by state-run banks. In Malaysia, which has become the largest source of modules for the U.S. market, high-tech industries enjoy a 10 year tax holiday.

In both nations, this attracted supply chains, as industrial and research clusters formed and the workforce developed a high degree of manufacturing skill. In the relatively deindustrialized United States, all of this would have to be rebuilt.

There will be some short-term benefit to U.S. module makers from import duties on solar, but it is not clear that this will offset lower levels of deployment incurred by both the higher price of imported solar and the uncertainty created by the Section 201 process. And it is the consensus of experts that such tariffs themselves are far from sufficient to result in widespread growth in the domestic solar cell and module manufacturing space. As we have stated in previous articles, if the U.S. wants a return of solar manufacturing, at a minimum it will have to develop a robust, long-term industrial policy. This is a much larger political task than simply imposing tariffs, and is well beyond the scope of any proposals made either by President Trump or previous administrations.

One of the most interesting wrinkles in the Section 201 trade case is the shift in import patterns that has happened in recent years. While much of the rhetoric of petitioners has focused on Chinese companies evading tariffs and seeking to dominate the global market, much of the imports that are coming to the United States market are not from China. Instead, they are from other Asian nations – and some of these imports are from companies founded and headquartered in the United States.

Recent trade data compiled by the Energy Trade Action Coalition shows that by far the largest single source of U.S. solar cell and module imports is Malaysia, with a total of $1.4 billion in product shipped to the United States during the first 11 months of 2017. Korea came in second with $951 million in imports, and Vietnam third with $643 million. China was the fourth-largest source of imports at $487 million.

Some of these imports from Southeast Asian nations are from Chinese companies that set up manufacturing in the region to avoid anti-dumping and countervailing duties (CVD) imposed by the Department of Commerce in 2014. However, U.S. companies First Solar and Sunpower both have substantial manufacturing in Malaysia, as does Japan’s Panasonic and Hanwha Q-Cells.

Korea, as the second largest-source of U.S. imports, has less of a presence by Chinese manufacturers, and instead hosts PV makers such as LG, Hanwha, Nexolon and others. LG in particular has had an enviable market share in the United States.

The position of these nations is a big change from five years ago, when China was by far the largest source of PV cells and modules imported into the United States. As such, it is many non-Chinese companies, including LG and SunPower, that will have to pay any global safeguard tariffs imposed under Section 201.

Editor’s note: Earlier this month pv magazine Americas Editor Christian Roselund traveled to First Solar’s Analyst Day in Ohio, where the following interview was conducted.

pv magazine: I noticed that First Solar has commitments up through 2020 for Series 4, and a significant portion of Series 6. Are you doing any prioritization of certain markets for Series 6 over others, or is it first come, first serve?

Widmar: It is a difficult balance right now, because we have something of an inverted procurement process. The normal process would be that you have the opportunity to secure a PPA, a contractual off-take agreement, and potentially you would have an EPC opportunity, and then someone would look to procure modules.

In some cases, what we are seeing now in the U.S., and even in some of the international markets, because of somewhat limited supply, especially of high-quality, high-efficiency modules, is that people are buying modules even in the absence of having firm, committed off-takers in some cases. Or buying the modules much sooner than they would otherwise.

So we are trying to prioritize to make sure that we can support our key international markets. We are trying to prioritize for our own development opportunities, either what we have contracted or what we have currently in the process of being short-listed, or in the process of having a signed agreement, but not having an announced agreement, because it could be  a CP is required, such as the commission has to approve.

We have, for example, awarded utility agreements — a few hundred megawatts — which are subject to public utility commission final approval. We won’t recognize them as final bookings until that actually happens, but we are reserving the volume for that.

But it is hard. We are seeing tremendous demand in the U.S., that is somewhat pulling in volume that we could potentially otherwise serve international markets with.

pv magazine: So do you think there is a possibility that people will be looking for modules as early as the second half of next year, and will be told that they have to wait until 2020, or that you just can’t get them?

Widmar: I think that there could be certain situations where customers could find themselves without adequate module supply. Some of it depends on what happens with the 201 case. The other thing is that there is a potential anti-dumping case in India right now. That could be another inflection point depending on how it plays out.

If there is a successful 201 case in the U.S. and if there are some restrictions around imports coming into India, then I think what happens is that a lot of the other international markets have an abundance of supply, because that supply, largely sourced from China, is going to have to go somewhere. So you could see much more demand in some of the international markets outside of the U.S. and India.

If neither one of those go through I think near-term it could be a very tight module supply situation.

pv magazine: To get back to the 201 case, I noted that First Solar took the step of, even though you are not formally involved in the case, coming out and making a statement during the remedy phase. Why was it important for First Solar to make a statement in this case, and what are your thoughts more broadly on 201 and what is ramifications are?

Widmar:   As you noted and everyone knows, we are not part of the case. We are not a petitioner to the case, we have not been active in the case. But a lot of the commentary that was coming through was directed at First Solar. Even to the point that First Solar should be held up differently and as an example of what Suniva and SolarWorld should have done in order to effectively manage their business in order to compete, and if they would have done that they would have been successful and they wouldn’t need the protection of  tariffs.

What we wanted to do was to provide a balanced view. We as a company, even though we aren’t part of the case, have also been impacted by the surge of imports. There is no doubt about that. We wanted to make sure that was well understood.

Secondly, there were undertones in comments around First Solar that we didn’t think were accurate in terms of the potential results of potential 201 case, depending on which way it comes through. We wanted to make sure that we have a voice. That’s why we made the statement that we did.

I don’t necessarily envision that we could do anything else at this point in time. The only thing that we continue to say — and we’ve highlight this in earnings calls — is that we do believe in free and fair trade. If you look at this case objectively you could certainly argue that there was a surge of imports that has been harmful to U.S. manufacturing.

We’d love to find a way to have more U.S. manufacturing. A remedy that is modest in nature should not have any adverse impact to the overall demand for solar. We’ve highlighted that, for every three cents, there is about a dollar of PPA impact. So if you had something that is a six to nine cents type of tariff, you are talking two or three dollars on the PPA price. For a PPA price with an off-take agreement that is fixed for 30 in some cases, two or three dollars is not going to have an impact on whether or not that project goes forward or not.

pv magazine: To switch gears slightly to the other pending policy matter, tax reform. Assuming that the BEAT provision and the AMT go through as written, what are you expectations of potential impacts to the U.S. market, and what is First Solar doing to prepare for any impacts?

Widmar: There are a couple of things that we need to look at. First off, the BEAT – the base erosion anti-abuse tax – is largely going to have an impact on the tax equity market.

We are starting to see more utility-owned generation, which is not going to be impacted by the BEAT tax. I think what could happen is that you could see more procurement from the utility in wanting to own the assets and then less trying to enter into the PPA off-take agreements, because those are the contracts that are going to require tax equity dependency.

So I think you need to put that to the side. And we have procured successfully hundreds of megawatts that we will deliver over the next couple of years for utility-owned generation.

This is a growing part of the market and I think that will continue. As it relates to the PPA structures or even the C&I market with utility-scale off-take, tax equity is a dependency. I can’t give you a sense of clarity around the implication because there is not enough of an understanding at this time.

There are two different forms, both the House and Senate have a version of it in their bills. We will have to see how it all comes together. Depending on who you talk with, it represents a significant impact to the tax equity market, in other cases it is less of an impact.

Normally what we have seen happen is that new sources of capital will come into the mix. And if there is a source of capital today that is active in the marketplace that is impacted by the BEAT tax, generally we will find other forms of capital that are going to come in and replace that.

The tax equity returns that investors are seeing today are very robust, and better than the cash equity returns in some cases. So it is just a matter of understanding what the provisions mean, and then trying to identify and source capital differently to still be able to monetize some of the tax credits that are associated with these projects.

pv magazine: When I look at the combination of things going on right now, the potential for the tariffs and/or quotas in the Section 201 case, plus the changes to the tax code, plus the Notice of Proposed Rulemaking at FERC, as a market participant what are your thoughts on how these things will affect the U.S. utility-scale market in the next couple of years?

Widmar: There is a convergence of a whole bunch of items that are happening right now, and each one of them will have different potential implications around the market.

The 201 case, as I indicated, with a modest remedy has limited impact on the overall demand.

Quotas – the same type of issue, per se. If you put a quota in place it limits the amount of modules that can come into the market. That can have a different adverse impact than a tariff, because a tariff effectively says that you can still supply modules in to the U.S., the projects will just have to afford the economic impact of the tariff.

The quotas could have a more immediate impact on limiting demand. It could result in a more robust U.S. manufacturing base, but that is going to take time. So you could have a near-term impact but a longer-term normalization. So you are going to have to see how that plays out.

The notice… that is still going to be worked through. When you get underneath and figure out what they are trying to address, I think it is no different than some of the issues that have been identified around renewables and the impact on the reliability and stability of the grid. And what you really have found when you look at it is that renewables, solar, and especially utility-scale solar with proper power plant controls and smart inverters, can actually improve reliability and stability of the grid.

So I think it is just another one of those things that will have to be better understood. And as people continue to evaluate and look at it we are probably going to come to a view that it’s not going to be something that will be needed.

And while it could have a short-term impact on procurement decision-making, it is not going to have a long-term impact. Renewables are economic, affordable, viable and have benefits that aren’t completely valued in the market today. Like controllable, flexible, eventually storage and dispatchable…. I think when there is a whole comprehensive real understanding of what renewables can provide as a viable long-term energy source, over the long term I don’t see anything that changes the demand profile for solar in particular over the next 5-10 years.

pv magazine: When we talk about the growth of solar as a resource, I noted on your slides that there is a lot of construction in what they call non-traditional areas throughout the South, the Mid-Atlantic, the Midwest, Oregon, a lot in Texas. Out of all of these areas both in the United States and internationally, what to you are the most exciting markets?

Widmar: When you look at the U.S., Georges (Antoun, First Solar CCO)  showed a slide to today  where the procurement is going to come from over the next couple of years and identified close to 20 GW. The interesting thing about that is that only about 6 GW of that is in California. It is a diverse profile across many different states, even up through the Midwest.

So to isolate and pick one in the U.S. that is more attractive than other… I like the diversity of the overall portfolio across the U.S. right now. There is not one particular market that is going to dominate in the ways we’ve seen over the last several years, where California especially through 2011, 12, 13, 14 was the sole source, and then it expanded a little into the Southwest. It picked up a little in Texas, and then we started to see a little demand outside of that. But now we are looking at an element of diversity across the entire portfolio – which is great. And it is reflective of the overall viability and economics around solar, and a better understanding of the reliability, and how it can compete relative to other sources of generation.

When you look internationally, there are still a lot of great markets. If I had to pick a market I’d like to see stronger than it is now, I think Brazil has tremendous untapped potential. There is a lot of market need there and demand. There is a great solar resource, and we have a great product for a hot, humid climate, with a great energy yield. So Brazil would be one market that I would like to see further along in terms of its advancement.

Would I like see us do better in China? Sure I would. We’ve had limited access to the Chinese market. We have sold about 100 MW into China this year. We’d like to develop that relationship further and potentially expand. Given that it is the largest solar market in the world, and given that we don’t really have access to that market, China is another place where I would like us to find better success.

When I look at what our market priorities are going into 2018, one is to develop a more robust and creative approach in how to access the Chinese market, as well as trying to figure out how do we do something better in Brazil.

China is just more or less us capturing shipments, Brazil is enabling more demand in the market globally because it is still a very young market.

pv magazine: This is interesting about China. China is a market that I’ve heard that Western companies simply can’t get into without sacrificing their IP. How do you approach the Chinese market?

Widmar: There are two different issues. One is yes – clearly there is a risk around IP. That assumes that you manufacture locally. And clearly, when you look at the access to that market, one dependency could potentially be having local manufacturing. But we are trying to approach it more from a partnership standpoint.

Again, as a leading global company with a competitively advantaged technology, we are trying to leverage that aspect. And we have found a couple of partners in China that highly value that. We’re able to sell through to China through those relationships. Would having a local presence with manufacturing or some other local presence further enable our ability to access the Chinese market? I’m pretty sure that would be the case.

We are going to have to be pretty careful in that regard. We are not going to risk losing our IP. It is far too valuable. There are only two companies in the world that have studied CdTe deeply. One is  First Solar, and the other is GE. And we acquired GE’s IP a number of years ago.

We’ve created a pretty strong position and we don’t want to put that at risk. So local manufacturing in China could be a challenge for us, but if we can leverage what we have seen so far in terms of leveraging deep relationships and leveraging the core technology and the advantages that we have to sell through into China, that is our preferred route.

First Solar marked a major milestone in its re-tooling towards producing large-format modules today, with the production of its first Series 6 module on new production lines at the company’s factory in Ohio.

The 1.2 x 2 meter modules are expected to become commercially available at 420-445 watts with efficiencies of over 17%, which is a testament to the thin film solar maker’s remarkable progress with cadmium telluride PV.

The retooling in Perrysburg began a year ago and has represented roughly $177 million in investment; when the retooling at First Solar’s much larger factory in Malaysia is complete the cost will be around $1.4 billion dollars.

First Solar expects to begin full-scale commercial production of Series 6 in Ohio in 2018, and to reach 600 MW-DC annually at this factory.

Concurrent with this milestone, First Solar has announced that it will be expanding its facilities in Vietnam and doubling the originally planned production capacity to 2.4 GW-DC annually. The twin factories are expected to begin production in late 2018 and early 2019.

Altogether, this means that with both its current Series 4 and the new Series 6, First Solar expects to have around 3 GW of annual capacity in 2018, 5 GW in 2019 and 5.7 GW in 2020.

And there is no shortage of demand for the new product, especially given the exemption for thin-film PV under the Section 201 case. First Solar announced two deals, a 595 MW supply arrangement for a combination of its smaller-format Series 4 and Series 6 with Origis Energy and a 200 MW Series 6 deal with D.E. Shaw.

The Origis deal will run from this month through 2020, and First Solar will supply Series 6 to D.E. Shaw in 2019. All are destined for projects in the United States.

Update: This article was updated at 1:03 pm EST on 12/05/17 to put the combined price tag for the retooling of First Solar’s factories in Malaysia and Ohio as well as the expansion in Vietnam at a more precise $1.4 billion.

Pending trade action through the Section 201 case has most of the U.S. industry concerned about the future and is already having negative effects on many U.S. and international solar companies active in this market. Many – but not all.

First Solar, whose thin-film PV modules are not covered in the scope of the case, is riding high. This was further evidenced in its third quarter results, with the company reporting more than $1 billion in quarterly revenue, a 19% operating margin and $206 million in profit.

And while this quarter’s results got a particular boost due to revenue recognition from the sales of the 280 MW-AC California Flats and 40 MW-AC Cuyama projects, First Solar is really succeeding based on demand for its modules. This has intensified due to the Section 201 case.

First Solar reports 4.5 GW-DC of module bookings in 2017 to date, which brings it to 7.4 GW of modules which have been booked but not yet delivered. This is over two years’ worth of output, even before the impact of idled lines for First Solar’s retooling is considered, and the company notes that it has contracts to supply modules into 2020.

“We have seen the Section 201 case in the United States accelerate procurement timing by some customers,” noted First Solar CEO Mark Widmar on the company’s results call. He also noted that a “surge of demand” in China was further creating tightness for modules from Tier-1 suppliers.

First Solar has been working hard to balance the demands of retooling with supplying its customers and, despite idled lines in its factories in Malaysia and Ohio, still managed to churn out 527 MW of Series 4 modules during Q3, with its active lines running at 98% utilization.

Series 6 on the way

New bookings in Q3 also include the company’s first bookings by outside contractors and developers for its larger format Series 6 modules, which it had previously scheduled only for its own projects.

According to First Solar Series 6 retooling is on schedule, with the first production to begin in the second quarter of 2018 in its Perrysburg, Ohio factory. First Solar says that in Perrysburg installation of tools is nearing completion and expects the front end of the lines to be operational some time before the end of the year.

The schedule is staggered for its much larger plant in Kulim, Malaysia. Widmar noted that the first vapor transport deposition coaters arrived this week at Kulim factory, where a total of eight lines have been idled for the switch to Series 6. S6 production in Malaysia is not expected to begin until the second half of 2018.

And while First Solar is making a significant and serious investment in Series 6, it appears to be having a harder time backing away from Series 4 than at first anticipated. The company notes that it may continue manufacturing S4 modules through the end of 2018, which may be a response to the heavy demand for its products.

And at a time when so many cell and module makers are struggling, First Solar is in the somewhat unusual position of having ample capital to fund its retooling. During Q3, the company brought in more than $500 million in cash, to bring its balance of cash and marketable securities to a staggering $2.7 billion.

On the back of all this good news, First Solar has slightly upgraded its guidance for the full year 2017. The company still expects to bring in $3.0-3.1 billion in revenue, but boosted its expectation for operating income to $165-$190 million, with higher earnings per share also anticipated.

pv magazine will be bringing you more detailed information on First Solar’s business position, including the progress of Series 6, when we visit the Perrysburg factory for First Solar’s Analyst Day on December 5.

First Solar had one Hell of a second quarter. The thin film solar maker began installing the first tools to make its large-format Series 6 in its Ohio factory, while also selling its Switch Station solar project to EDF. But what really changed First Solar’s current situation is the unexpected boon that the company has received from Suniva’s Section 201 trade filing, which has led to the hoarding of modules in anticipation of potential import tariffs and/or restrictions.

Since its last earnings call, First Solar reports 1.5 GW of module bookings, between third-party sales and new projects. This brings it to year-to-date bookings of 2.1 GW, which means that First Solar could be running low on modules to sell, as it shuts production lines down to prepare for the switch to Series 6.

“There is a tremendous amount of demand right now, across all segments of the market,” noted CEO Mark Widmar on the company’s results call.

When all the current bookings are measured against supply for 2017 and 2018, First Solar expects to only have 300 to 500 MW of Series 4 supply left over. The company has clearly seen that despite its desire to move quickly to Series 6, that Series 4 is still selling well.

But the truth is that First Solar doesn’t want to pass up either opportunity, and as a result it is increasing its investment. The company now plans to install Series 6 production equipment in its idled Vietnam factory, and is considering running Series 4 a little longer than previously planned in its enormous facility in Kulim, Malaysia.

And when the company spends the full billion dollars that it is planning for re-tooling, First Solar should have nearly 4 GW of annual capacity across its fleet by the end of 2019. This includes the 1 GW of Series 4 that the company has said it will retain, a number which it is considering increasing.

Prices and profit

Prices haven’t been bad either. While First Solar notes that solar module prices are still affected by a persistent global oversupply, CEO Widmar says that as a result of the hoarding in advance of a Section 201 decision “pricing has firmed up.” This is good news for First Solar, with no real downside, as its thin-film modules are exempt from any trade action that could result from the Section 201 case.

The result of both higher bookings and higher prices made for a good quarter for First Solar. The company’s sales were down 39% year-over-year due in part to shuttered lines and in part to fewer project sales, but despite $18 million in restructuring and asset impairment charges, First Solar still pulled off a positive operating margin and a net profit of $52 million.

This is not bad at all for a company in the middle of retooling. In addition to the benefit from third-party module sales, First Solar appears to be happy with the price it got for its Switch Station project, which it notes was higher than it would have recieved from yieldco 8point3 Energy Partners.

First Solar pulled back from 8point3 as it decided to chose to undergo the massive retooling to move to Series 6, and now the yieldco is undergoing a strategic review to decide what path to take forward. In the interim it isn’t picking up more projects, which is freeing up First Solar to sell its projects on the open market, which the company says if offering higher returns.

All of these factors combined have cause First Solar to up its guidance for the rest of the year, in terms of shipments, revenues, margins, profitability and cash balance. The most dramatic change is in operating income. Before First Solar was not sure if it would be in the red or the black in 2017, but now expects $115-$180 million in operating income, with $600 million more in net cash balance, in part due to reduced capital expenditures.

However, the company is clear that none of the many changes it is seeing are slowing down its timeline for moving to its large-format Series 6. “If there is any delay to S6, we don’t want to do that,” notes Widmar.

For a company in the midst of a major re-tooling and reorganization of its business model, First Solar brought in remarkably strong financial results during Q1 2017. The company has already shut down 12 of its thin-film module manufacturing lines, four in Ohio and eight in Malaysia, but still managed a 2% year-over-year increase in revenue to $892 million, a net income of $9.7 million, and brought in $493 million in cash.

Of course, much of this was due to taking the large majority of impairments – $821 million in total – during Q4 of last year, and only taking an $8 million impairment loss in Q1. Greater than anticipated revenue from the sale of First Solar’s Moapa project in Nevada didn’t hurt any, and it is less clear when exactly when First Solar is going to be shelling out the roughly one billion dollars that it will take to retool to its large format Series 6.

Q1 saw First Solar in the middle of this transition, and during the quarter ordered tools for Series 6 lines in both Ohio and Malaysia. The company plans to install this equipment beginning in Q3 2017 in Ohio, and to roll out the first commercial shipments of Series 6 during Q2 2018.

During the quarter First Solar deployed prototype Series 6 modules at a site in Arizona, and stated that it has already achieved lower install hours per megawatt than crystalline silicon (c-Si) modules, with initial 3rd party construction contractor quotes showing a total balance of systems (BOS) costs similar to c-Si.

The company notes that it is soliciting feedback from construction contractors, structure providers and independent engineers, and has received and independent assessment of the electrical BOS profile. These are important considerations for First Solar, which has lamented the BOS disadvantage of its Series 4 modules, which are much smaller than conventional c-Si PV modules.

However, Series 4 production continues. First Solar pumped out 712 MW of modules during the quarter, only a 6% fall from the previous quarter. Part of this is aided by the company’s ongoing efficiency increases, with its average module efficiency rising to 16.7%.

During Q1 First Solar shipped 400 MW of modules, booked 500 MW, and expects to ship around 2.5 GW this year. The company currently has 1.5 GW of bookings for Series 4, and plans to only have 1.7 to 1.9 GW of Series 4 after these orders are filled.

As part of the emphasis on Series 6 First Solar has dialed back both its project development and construction activities, and among its 1.5 GW of bookings for Series 4 only 200 MW are going to internal projects.

First Solar is also planning to withdraw from yieldco 8point3 Energy Partners, which it jointly sponsors with SunPower. This could provide additional cash for the company, and First Solar notes that the switch to Series 6 is “very capital intensive”.

Despite these moves, First Solar CEO Mark Widmar was sure to stress that “development remains a core part of our strategy”, and that the company will continue to develop projects where it makes the most sense.

First Solar also notes that it is beginning to sell some of the projects it builds before completion, stating that it can get better value this way, as well as recycling capital more effectively.

And while this may be prudent, if any solar manufacturer is well bankrolled for the kind of massive shift that a move to larger format represents, it is First Solar. At the end of Q1 First Solar was sitting on more than $2.4 billion in cash, and expects to still have $1.5 to 1.7 billion at the end of 2017.

First Solar has also improved its 2017 guidance, with its expected revenues rising by around $50 million to a mid-point of $2.9 billion. The company has also shifted its operating income range to a presumption of thin profitability instead of loss, despite $525 to $625 million in capital expenditures.

When President Donald J. Trump talks about improving enforcement of U.S. trade laws, it’s music to SolarWorld’s ears – and it hopes the tough talk is backed by tough actions.

In the document released Wednesday, Trump argues that it is nearly impossible for U.S. companies to compete against foreign imports that are typically subsidized by the governments of those countries. The document, in keeping with Trump’s rhetoric on trade since the campaign, focuses primarily on China. The document calls for clear trade rules, as well as the use and enforcement of trade-defense instruments to restore fair competition and maintain efficient markets.

“[The United States] will not tolerate these unfair trade practices that harm American workers, farmers, ranchers, and businesses,” the trade-agenda document says. “These practices lower living standards for all Americans by distorting U.S. and global markets and preventing resources from being allocated in the most efficient manner.”

In the past two years, the Chinese manufacturers have produced huge volumes of solar panels in response to unrealistic domestic solar-installation goals set by the Chinese government. Once again, SolarWorld and other U.S. solar manufacturers are seeing reduced margins, which echo the 2011 panel-price collapse and put pressure on the slim margins of U.S. panel manufacturers.

Stein says the company welcomes the emphasis on trade law enforcement in light of its potential to save U.S. jobs and manufacturing.

“We cannot allow China now to monopolize the sun by violating trade rules and engaging in unfair competition,” says Juergen Stein, U.S. president of SolarWorld. “Trade defense is necessary to address the fact that non-market economies such as China are strategically building up state-financed over-capacities and severely damaging market-economy industries like the solar industry.”

SolarWorld’s interest in stopping Chinese exports of subsidized solar panels goes back to 2011 when, in response to optimistic projections on the size of the world solar market, Chinese manufacturers ramped up production capacities and produced enormous quantities of panels intended for export.

This over-supply of modules lowered global module prices, wreaking havoc on both Chinese and Western panel manufacturers’ margins and putting many Western PV makers out of business. SolarWorld, which manufacturers cells and modules in Oregon, decided it would lead a coalition of manufacturers in an effort to stop what it argued was intentional dumping.

In November 2011, the company filed the first of two anti-dumping and anti-subsidy cases against China, which led the United States to impose steep tariffs on Chinese cells. This led to a widespread use of Taiwanese PV cells, and in 2013, SolarWorld filed another complaint against both Chinese cells and modules and Taiwanese cells, which led to more tariffs being imposed.

In the last few years, many Chinese manufacturers have set up manufacturing capacity in Southeast Asia in an effort to avoid these tariffs altogether.

First Solar is one of the oldest and largest PV makers in the industry, and is currently beginning what what may be the most significant transition in its history: the switch to its large-format Series 6 modules.

This was the over-riding theme in the company’s Q4 results, which show steady technology progress but difficult financials. First Solar’s revenues fell in half year-over-year to only $480 million, the lowest level in years.

More significantly, the company reported a whopping $729 million in restructuring and asset impairments, which gave it a net loss of $765 million. It is unclear exactly what the breakdown of these impairments are, however during the quarter First Solar shut down four lines at its Ohio factory in preparation for the switch to Series 6, and additionally wrote down its Barilla Project in Texas.

Barilla had been selling power on a merchant basis in the ERCOT market, as the only project known to pv magazine staff to sell power without a contract outside of Latin America. However, this business model gamble does not appear to have been successful, and First Solar blamed falling power prices for a lack of profitability of Barilla.

First Solar had a number of other difficulties during the quarter, including abandoning its Tribal Solar project in California, citing difficulties with the Native American tribe that initially approved the project on its land and then withdrew under new leadership, leading to the scrapping of the PPA. Finally due to timing of project sales First Solar was not able to recognize revenue on a number of U.S. projects which it completed during the quarter.

First Solar cites the timing of project completion as the primary culprit behind its failure to hit its 2016 financial goals, as the company’s sales of $3 billion came in well below its target of $3.9 to $4.1 billion. And while the full year margin of -17% and net loss of $358 million are likewise unfortunate, the company still closed with roughly $2 billion in cash.

On the operating side, things look quite strong. First Solar finished Q4 with a fleet average module efficiency of 16.6%, a 50 basis point improvement over a year prior, with its best line finishing the year at 16.9%. The company notes that this provides a strong basis for its Series 6, which is based on the same technology as its current Series 4.

“We are not reinventing the core technology behind series 6, but increasing the form factor,” noted CEO Mark Widmar on the call. For Series 6 the company is targeting 18% efficiency, based on more available area with its form factor, changes to the electrical design of the module, and improvements through the use of tools.

This change is already underway. During Q4 First Solar shut down its first lines at its factory in the U.S. state of Ohio, and began major tool orders for Series 6 after the beginning of 2017. The company intends to being installing these tools during the third quarter, and plans to begin producing modules in the second quarter of 2018.

The timeline for First Solar’s Malaysia factory represents a slight staggering from Ohio. First Solar expects to stop production at 8 lines in Malaysia during Q2 2017, and begin ordering tools during the same quarter, for a production start during Q3-Q4 of 2018. Between these two factories, this should result in over 2 GW of annualized Series 6 production at both factories by the end of 2018.

Along with this shift to larger-format modules, First Solar is scaling back its development and construction activities to focus on manufacturing. In the future the company expects to build only 1 GW of PV plants annually through its systems business, and dedicate another 2.5 GW of production to module-only sales.

Q4 may have provided the beginning of what that will look like. Systems revenue fell to less than half of First Solar’s earnings during the quarter, down from around 3/4 over the full year 2015. The company appears bullish about its position to move into 2017 and its Series 6 venture, with Chief Financial Officer Alexander Bradley stating that the company is exiting the year “with as strong a balance sheet and cash position as we’ve ever had”.

First Solar’s 2017 guidance is a mixed bag. The company has upped its revenue forecast to $2.8-2.9 billion, perhaps reflecting revenue recognition on projects pushed back, but expects to just about break even with -$40 to $25 million in operating income, and decreased its operating cash flow to $250-350 million.

The biggest bet is on how the transition to Series 6 will proceed. First Solar CEO Widmar appears confident, noting that the company will rely on the experience of its tool suppliers. “In some cases we have been working with these companies for nearly a decade,” notes Widmar. And while he acknowledges that manufacturing risk, including throughput and yield, could affect the Series 6 launch, “The risk of the core technology is low.

Panasonic will supply PV modules to Tesla from its factory in Malaysia, as well as restarting an idled factory in Japan, according to an exclusive in the Nikkei Asian Review.

The deal will allow Panasonic to sell its heterojunction intrinsic thin film (HIT) modules to SolarCity customers in the United States, representing a major inroad to one of the largest residential solar markets in the world. In the most recent quarter the United States installed around 500 MW of solar PV on homes and apartment buildings, and SolarCity holds around a 1/3 share of this market.

This deal comes at a good time for Panasonic, and will allow the company to resume operations at its factory in Kaizuka, Japan some time in 2017. In recent financial results Panasonic reported declines in the sales of its heterojunction intrinsic thin film (HIT) PV modules, which it has blamed on market contraction in Japan.

Bloomberg New Energy Finance notes that heterojunction technologies such as HIT are well-suited to the space-constrained residential market, as their higher output can offset higher costs. However, BNEF Senior Research Associate Xiaoting Wang says that the recent collapse in PV module prices calls this logic into question.

“Investors’ calculation analyses are not holding anymore,” Wang told pv magazine. “That is the main challenge HIT is facing.”

The new deal also represents a further collaboration between Tesla and Panasonic, which have been working together since well before Tesla’s acquisition of SolarCity. Tesla and Panasonic were already collaborating on Tesla’s battery gigafactory in Reno, Nevada, before Tesla announced that Panasonic would operate SolarCity’s new gigafactory in Buffalo.

SunPower will take over the 800 MW Malaysian cell production facility it developed under a joint venture with AU Optronics (AUO) in 2010. The deal will allow SunPower to carry out technology upgrades on the facility and “resolves a dispute between the two companies,” a SunPower statement reveals.

The nature of the dispute is not expanded on in the statement. Under the conditions of the $1.2 billion JV agreement, entered into in July 2010, any dispute between the companies under the agreement requiring arbitration was to be settled by a court in San Francisco. California. In the initial JV filings, the companies committed to making a $350 million equity investment and procuring the remaining debt financing required to develop the facility.

Under the agreement dissolving the JV announced yesterday, SunPower will continue to source wafers from AUO, with the Taiwanese company committing to purchasing 100 MW of SunPower’s E-series modules.

“SunPower is working to increase our future manufacturing capacity for our highest-value products while driving down costs,” said SunPower CEO Tom Werner, in a statement. “We will thoughtfully manage capacity during the current industry volatility, but we are committed to being a leading upstream industry participant over the long term, leveraging our unique, high-value solar panel technologies. Purchasing AUO’s portion of the Melaka joint venture is an opportunity for us to enable technology upgrades, cost reductions and future expansion consistent with this strategy.”

SunPower said that it would carry out upgrades to the manufacturing facility, located in Melaka, Malaysia, and notes that there is potential to add production capacity at the site. When initially developed, the Melaka fab produced SunPower “Generation C” solar cells, with the U.S. company purchasing 80% to 95% of the output on a “cost-plus” basis.

The transaction is expected to close by the end of the month.