United States: A two-year tariff relief from the US from solar panels manufactured in Southeast Asia will elapse from Thursday, and with it, a race to get through the over 8 GW of cells and modules, which have been accumulated by American project developers duty-free over this period begins.

The situation could cause a mini-fever in the already sizzling U.S. solar deployment and, at the same time, cause irritation to the budding home-grown manufacturing sector that wants developers to switch to American-made equipment, as reported by Reuters.

Stockpiled Panels Reach Record Levels

Clean Energy Associates has revealed that US solar developers have noted about 35GW of imported panels stockpiled in US depots since President Joe Biden upturned the duties on Malaysia, Thailand, Cambodia, and Vietnam in 2022 to hasten home-grown projects against climate change.

That is almost the same as the whole-year installation planned for 2024 in the United States, according to research carried out by Wood Mackenzie.

The majority of the inventory is thought to have originated from the relevant countries. After June 6, when the tariffs will be resumed, companies will have only 180 days to utilize the Southeast Asian stock. Otherwise, they will need to pay the tariffs.

Deadline Pressures and Project Acceleration

Business entities have already drastically ramped up project development, with utility-scale installations growing by 135% to 9.8 GW in the first quarter of the year, a market research conducted by Wood Mackenzie established.

“The temporary suspension of tariffs effectively served its purpose and helped provide ample solar modules for electricity generation required for growing clean energy demand in the country,” Stacy Ettinger, Senior Vice President of Supply Chain and Trade at the Solar Energy Industries Association.

An attorney representing the US solar manufacturers who are seeking new tariffs on Southeast Asian imports dismissed the arguments, saying it was impossible to expect the inventory to be exhausted within six months.

“This tariff moratorium has resulted in such a buildup of stock and an excess which we are seeing today, and which has also resulted to the 50 percent crashing of the market that is inimical to the U. S. industry,” said Tim Brightbill, a trade attorney with Wiley Rein, in referrer to domestic manufactures of panels.

The abundant availability of panels is a reversal for the US industry, which until a year ago was constrained by supply bottlenecks arising from the COVID-19 outbreak and other issues, including a solar equipment controversy over the use of forced labor, among others.

Shift from Supply Constraints to Stock Abundance

After 2023, solar imports rose and increased by nearly 14% in the first quarter this year, 88% of which came from the aimed countries, S&P Global Market Intelligence read. The tariffs are intended to affect the imports by firms which are seen to be avoiding paying duties on Chinese products by having them processed in these four countries in Southeast Asia, as reported by Reuters.

The White House announced last month it would strictly enforce the 180-day ban deadline to halt stockpiling.

White House Enforces Deadline Amidst Industry Debates

Separately, SEIA did not provide information on the deadline in the statement to Reuters.

SEIA had been an opponent of circumvention tariffs due to concerns that these would increase project costs and put climate change mitigation efforts at risk in the country.

However, it did not call for an extension of the tariff holiday.