New module AD/CVD case and bifacial import duties reinstated: What lower risk options do I have left?

With a new Anti-Dumping and Countervailing Duty (AD/CVD) petition officially filed on April 24, 2024, against Cambodia, Malaysia, Thailand, and Vietnam, the industry rumblings of potential new solar duties appear to have come to fruition. 

The new case focuses on whether imports of cells (imported individually or as modules) produced in one of the four named countries have injured domestic producers and are sold at unfair prices (AD) and/or with unfair government support (CVD). If the U.S. International Trade Commission rules that material injury or the threat of material injury has occurred and the U.S. Department of Commerce finds unfair pricing and government support, imports of cells from Cambodia, Malaysia, Thailand, and Vietnam would be subject to new duties.

Preliminary anti-dumping determinations are expected around an October-November 2024 timeframe and, if affirmative, would be the trigger date for new duties. If there is a surge in imports during the three-month period after the petition was filed, it is possible that duties could be applied retroactively to July-August 2024, based on the established statutory timeline, and potentially as early as May-June 2024 if the case is fast-tracked.

Additionally, the Biden Administration just announced the removal of the Section 201 exemption for bifacial panels on May 16, 2024, which will add the same 14.25% duty that currently applies to monofacial modules to bifacial modules. Combined, these changes force solar module buyers to consider additional risk factors and navigate market uncertainties not seen since the Auxin case shook the market in 2022 and increased prices by almost 50%, from around $0.27/W to $0.40/W. 

While there are a few key steps you can currently take to mitigate risk, time is of the essence. Our experts recommend buying now if you can, with delivery of modules as soon as possible as your best bet to avoid the potential new duties. Based on what we know today, here’s a breakdown of options to avoid additional duties over the coming months.

Reduce Section 201 risk:

Have a signed contract in place as of bifacial import duty reinstatement and receive modules within 90 days

  • While we do not yet have an official date for when the bifacial module exclusion under Section 201 will be removed, we do know the duty-free period for bifacial modules is quickly coming to a close. The good news is that if you have an existing contract for bifacial modules with a delivery date within 90 days of the duty reinstatement date, it will still qualify for the bifacial exemption. Additionally, modules delivered or in a warehouse before the ruling date would not be subject to these duties as they are already in the country. 

Options to minimize existing Auxin duties and reduce new AD/CVD risk: 

Buy modules imported before June, 6, 2024 and install by December 3, 2024

  • If you can install by December 3, 2024, a great option is to purchase modules already imported from Cambodia, Malaysia, Thailand, and Vietnam before June 6, 2024. These modules were imported during the two-year solar moratorium period established by President Biden and would not be subject to duties if physically installed by December 3. 
  • Because of this tight installation period, these modules often are competitively priced. However, be sure to understand which party bears utilization risk, as the importer of record is responsible for ensuring proof of installation and related duty risk. We have seen instances where the importer or seller has attempted to shift utilization duty risk to purchasers via contract language.

Receive module delivery by July 10, 2024

  • If you can import modules excluded from the original circumvention case by July 10, 2024—the estimated date when duties from the new AD/CVD investigation could be retroactively applied—you may be able to purchase cells from Cambodia, Malaysia, Thailand, or Vietnam without increased risk. This timeframe assumes an extension of the preliminary determinations, which is normal practice. (However, under a most conservative approach, duties could start to apply as early as May 21, 2024). Since these are not subject to Auxin duties, there is no requirement to install them by December 3, 2024.
  • Modules purchased during this period must meet certain requirements to avoid existing AD/CVD duties resulting from the Auxin Solar case ruling. To be exempt, you need non-Chinese wafers or four of six non-Chinese components (i.e., silver paste, aluminum frames, glass, back sheets, ethylene vinyl acetate sheets (EVA), and junction boxes).

Other options for install after December 3, 2024

  • If your installation timeline is farther out, there are a few other ways to avoid the new AD/CVD duties:
    • Order a bill of materials (BOM) that is using cells outside of the four countries named in the new filing – Cambodia, Malaysia, Thailand, and Vietnam – and China. 
    • Order a BOM that is subject to the Auxin duties from a supplier with a reasonable, fixed cash deposit rate. To account for potential duty rate increases from annual administrative reviews of AD/CVD orders, this cash deposit rate may be higher than the current AD or CVD rates applicable to the company.
    • Purchase cells made in the U.S. 

Consider UFLPA risk:

  • In addition to the factors outlined above, it is essential to consider UFLPA risk any time you are importing modules. Make sure your module supply chain is well documented and traceable and look for positive criteria such as non-Chinese-made polysilicon, past release from detention, and importation success. 

If you need help navigating these uncertain times and figuring out the best products for your project and when to buy them, Anza is here to help. With clear visibility into available modules for over 95% of the U.S. supply, our Anza Risk RatingTM data and analytics objectively assessing AD/CVD and UFLPA risk, and experts with a finger on the pulse of policy updates, we can help you reduce risk from existing and potential new duties. Whether you can buy ASAP and avoid the bifacial duty reinstatement or are looking at installation in 2025 and beyond, we can walk you through all the options available so you know that you are finding the best deal with the least risk.

Talk with our team today to find out more about how to de-risk your upcoming module procurement.