US solar module imports face market uncertainty amid spending bill deliberation

The US solar module market faced significant uncertainty in the second quarter due to tax credits that are crucial for project implementation being at risk.

US President Donald Trump's "One Big, Beautiful Bill Act" moves away from investments in intermittent renewable energy instituted by the previous administration's Inflation Reduction Act, jeopardizing many project pipelines yet to start construction.

In addition, the US Senate shortened the longevity of investment tax credits by a year, maintaining them for projects beginning construction within a year of the bill's passing.

As a result, there has been a downward trend in US solar module import prices throughout Q2. On July 2, Platts last assessed DDP US TopCon modules at 25 cents per watt for volumes between 5 and 50 MW. This price remained stable week over week and continues to hold steady as the market awaits clarity from pending legislation.

Market uncertainty has led to participants expressing a wait-and-see sentiment regarding the potential phaseout of investment and production tax credits, which were essential to financing many future solar and wind projects.

"The biggest things tied to it are not only the IRA and ITC credits, but also FEOC [foreign entities of concern] language, which would be really restrictive to suppliers across the board, not only on the module side but the storage side as well," said a solar module manufacturer.

For US-assembled modules with imported cells, prices throughout Q2 have remained in the mid-30s cents/W, with the manufacturer saying amid tariff and sourcing uncertainties, domestic prices have remained mostly stable.

Shifting supply chains

Multiple market participants have observed the continued restructuring of supply chains following the implementation of anti-dumping and countervailing duties on Cambodia, Malaysia, Thailand and Vietnam in Q2 2024, in addition to recent tariffs influencing sourcing strategies.

In response, market participants are increasingly sourcing from Laos, Indonesia, and the Middle East, where AD/CVD duties do not apply and reciprocal tariffs are lower than in the other Southeast Asian countries.

A solar module supplier explained how the FEOC language could influence sourcing strategies, noting that modules sourced from Southeast Asian countries often still incorporate imported parts and technology from countries impacted by restrictive legislation, particularly China. This situation could disqualify them from tax credits under the updated bill passed by the Senate.

Furthermore, to be eligible for the 45X credit, solar manufacturing inputs sold after 2029 must meet an 85% cost-ratio threshold. This requirement is designed to ensure that domestic manufacturing expands in line with the investment generated by the IRA.