Increased Customs Clearance Of Solar Panels in China

According to foreign media reports, John Podesta, senior White House advisor for clean energy to US President Joe Biden, confirmed during the CERAWeek international energy conference in Cambridge on 7 March local time that Chinese solar panels are re-entering the US through customs.

Podesta said, "With clearer guidance rules, we're seeing more shipments coming through (customs)." However, he did not elaborate further on the exact quantities.

Foreign media reports say that more than 1,000 shipments of Chinese solar modules have been piling up in US ports since June last year. However, related sources indicate that at the end of last year, JinkoSolar's temporarily detained PV modules were the first to be released by US customs. Another source from Trina Solar was quoted by foreign media as saying that in the past four months, the company has had more than 900 megawatts of solar panels pass through US customs, with less than 1% of the products being held for review.

On 11 November last year, in response to the backlog of Chinese solar modules at US ports, then Foreign Ministry spokesman Zhao Lijian said that the US side should immediately stop its unreasonable suppression of Chinese PV companies and release the detained solar modules in question as soon as possible. China will continue to firmly defend the legitimate rights and interests of Chinese enterprises.

Releases began late last year

According to US Customs and Border Protection, the agency held 1,053 shipments of solar energy equipment without release between June 21 last year and October 25 last year. The agency would not disclose the manufacturer or confirm details about the number of solar equipment in these shipments, citing US federal laws protecting trade secrets.

But according to industry sources cited by foreign media, the seizures include panels and polycrystalline silicon cells with a possible capacity of 1 gigawatt, which are mainly produced by China's Trina Solar, JinkoSolar and Longi Green Energy. These companies typically account for a third of the supply of solar panels in the US.

In an industry note early last December, Philip Shen, managing director of Roth Capital Partners, said that industry sources had told him that US Customs and Border Protection had released a large number of solar panels for sale into the US market, including JinkoSolar's products.

In an exchange with investors at the end of last year, JinkoSolar was asked whether the company's shipments to the U.S. market were improving, to which the company replied: "The current supply to the U.S. market is showing some signs of improvement, and continued smooth customs clearance is still dependent on the company's supply chain traceability to continue to advance. In the long term, the U.S. and global market demand is still positive, the company will combine the perfect overseas supply chain and integrated production capacity layout to actively promote the relevant work."

In addition, related news shows that in early December last year, JinkoSolar's temporarily detained PV modules were released by the first batch of US Customs.

In a recent email, Trina Solar's US spokesperson Melissa Cavanagh said, "Trina Solar's data systems and supply chain management enable us to provide detailed traceability documentation as required by US Customs ...... This has greatly reduced at-port delays."

Last month, in response to another public records request, U.S. Customs and Border Protection said it had released 374 shipments of electronics, but did not specify how many of those were solar products.

Slowdown in imports affects US project construction

Solar installations in the US slowed by 23% in the third quarter of 2022, with nearly 23 GW of solar projects delayed due to the unavailability of panels, according to the American Council on Clean Energy (ACP). Meanwhile, the average price of a solar power purchase agreement (PPA) rose 33 per cent in the fourth quarter of 2022 compared to a year earlier. The association said the freeze on project construction poses a risk to the Biden administration's clean energy and climate change goals.

In 2021, the Biden administration set a goal of ridding the US power sector of fossil fuels by 2035, a goal that would see 40% of US electricity demand supplied by solar, up from the current 3%. In a 2021 report, the US Department of Energy said solar installations must increase to 60 GW/year by the middle of this decade to meet the US government's target.

The slowdown in imports also poses a risk to US companies. Kevin Smith, chief executive of US solar developer Lightsource bp Americas, said the time from greenfield development to start construction on a 100 MW solar project in the US had increased from 18-24 months to 36-48 months.

Smith said procurement decisions have had to be made two to three years before construction begins, rather than just six to 12 months in advance as previously, and these supply chain challenges have increased project costs by 20 to 30 per cent.