Navigating The Future: The Impact Of Protectionism On The US Solar Supply Chain

Wood Mackenzie's latest report "The US solar supply chain under more protectionism" points out that as trade tariffs and import restrictions on the US solar supply chain gradually increase, although the increase in domestic manufacturing capacity will be an inevitable trend, it will lead to a decrease in dependence on international suppliers and an increase in photovoltaic supply chain costs, and domestic market purchase prices will tend to be expensive.

At present, the battery to module processing cost for double-sided PERC modules in the United States is $0.23/W, with a final selling price of approximately $0.33/W, and the batteries are mostly supplied from Southeast Asia. It is expected that by 2025, with the construction of local battery production capacity, the processing cost of double-sided TOPCon components using American made batteries will be $0.18/watt, and the selling price will increase to $0.41/watt. By 2032, the processing cost of batteries to components will decrease to $0.16 per watt, while the selling price will still be as high as $0.35 per watt. In contrast, the battery cost in Southeast Asia is about 0.08 US dollars per watt, while the component processing cost is about 0.07-0.08 US dollars per watt. Even with the implementation of new tariffs by the United States, the cost of purchasing batteries from non-tariff countries such as Indonesia and Laos can still remain at around $0.10 per watt.

The analysis also suggests that if the United States continues to push forward protectionist measures, it will cause market chaos, equipment price increases, and may hinder project progress, thereby affecting the achievement of the country's decarbonization goals. In addition, factors such as high labor costs and lack of economies of scale in the United States will also drive up production costs. Industry insiders believe that the growing anti China sentiment and lobbying from manufacturers will lead to more trade measures, and the upcoming presidential election adds to the uncertainty. Michelle Davis, head of Wood Mackenzie's global solar division, pointed out that if Trump is re elected, tariffs could intensify, with a maximum of 60% tariffs imposed on Chinese imports.

In a future with limited supply, Wood Mackenzie expects the United States to have 11 GW of silicon wafers, 55 GW of batteries, and 88 GW of module production capacity. According to the currently announced expansion announcements, the US silicon wafer production capacity will increase to 22GW, battery production capacity will reach 74GW, and module production capacity will increase from 18GW in 2023 to 139GW in 2027.

The report suggests that in this situation, photovoltaic buyers should adjust their procurement strategies and ensure equipment supply through direct partnerships to obtain better prices and conditions.