As of this summer, the U.S. has 10.6 gigawatts of operating cell capacity, according to the Solar Energy Industries Association. The new cell tariffs should drive additional demand to Qcells, ES Foundry, Suniva, and Silfab — the only companies producing that item domestically. That will still leave tens of gigawatts of annual installations exposed to higher prices for cells that will have to be imported.
“The U.S. will remain dependent on importing cells, wafers, ingots, and/or raw polysilicon for the foreseeable future,” said Pavel Molchanov, a cleantech investment analyst at Raymond James.
The median price for solar modules in the U.S. is 27.1 cents per watt, according to the database compiled by Anza Renewables; that reflects a mix of domestic and imported modules. This means the new floor price for imported panels will be 40% higher than the current median price on the U.S. market.
Modules assembled in the U.S. from imported materials cost 30 cents per watt; now, the cells that go into those modules will have a minimum import price of 22 cents per watt.
The median price for domestic modules using domestic cells is 47 cents, per Anza. Those panels could become even more expensive if the manufacturers can’t get their hands on domestic wafers.
The U.S. already had among the most expensive solar module prices in the world thanks to previous tariffs; the new price floor will be nearly five times the global benchmark price, Molchanov noted.
The decision provides for tariff exemptions if companies get Commerce Department sign-off on plans to build factories by January 20, 2029. This could mitigate tariff-driven price increases while ingot, wafer, and cell capacity grows to meet demand.
What do the Section 232 tariffs mean for domestic solar factories?
Tariff supporters see this as a vital tool to protect the fledgling U.S. solar manufacturing base and drive further investment in the trickier, more expensive stages of the supply chain. Since it’s a global tariff, it could finally end the long-running Whac-A-Mole problem in which U.S. tariffs belatedly catch up to Chinese manufacturers setting up shop in new countries.
“Every time U.S. cell and module producers seek trade relief, the Chinese companies shift their unfair trade practices to other countries,” said Brightbill, a partner at Wiley Rein LLP. “We are hopeful that if this Section 232 action is done right, it could be an important step toward addressing this problem.”
This is a good moment to be Qcells, the subsidiary of Korean conglomerate Hanwha that invested more than $2 billion to build a combined ingot, wafer, cell, and module plant in Georgia. Cells started rolling off the line in June, and the ingots and wafers are set to enter production later this year. Hanwha’s stock price surged 17% after the announcement, though it has since subsided somewhat.
Longtime U.S. manufacturer First Solar stands to benefit as well, as its cadmium-telluride thin-film technology does not rely on the silicon supply chain. The company can sit back and watch its competitors scramble to figure out the new realities of global trade in silicon. Not surprisingly, First Solar CEO Mark Widmar hailed the 232 outcome as “one of the most strategically significant trade measures in decades.”
But a cohort of manufacturers could be caught in an awkward transitional phase: Their module production will be protected from foreign modules, but their own costs will go up unless more cell capacity comes along.
