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Buying rush pushes US solar panel prices 'way higher than other markets'

Canadian Solar Inc. hopes improved operations at its plants in China and Southeast Asia will unlock new supplies of solar cells it can use to feed a hungry U.S. market, where the threat of import tariffs has buyers scrambling to secure equipment ahead of a potential price hike.

A rush to stockpile equipment has already pushed solar panel prices in the U.S. to levels that are "way higher than other markets," Canadian Solar Chairman, President and CEO Shawn Qu said Aug. 14 on an earnings conference call.

An executive at solar cell and panel maker Hanwha Q CELLS Co. Ltd. recently said demand and prices should continue rising into the fall since the uncertainty that is roiling the market "will only continue to build" until the U.S. International Trade Commission recommends a course of action to President Donald Trump.

With its existing capacity already spoken for in the U.S., Canadian Solar needs fresh supplies in order to take on any new U.S. customers, Qu said. Efforts to "debottleneck" operations at certain plants are expected to help boost the company's capacity to produce solar cells by about 5% during the second half of 2017.

"U.S. demand is pretty high," Qu said, and "the price in [the] U.S. is, I will say, strong, stable at this point." Solar panels are selling for between 40 cents per watt and 50 cents per watt in the U.S., Qu said. Executives said the company's average sales price globally during the second quarter was approximately 38 cents per watt.

Conditions in the U.S. market are being shaped by a trade case that was brought by Suniva Inc. in April, shortly after the panel manufacturer, which is based in Georgia and majority owned by Hong Kong-headquartered Shunfeng International Clean Energy Ltd., declared bankruptcy.

Suniva, which was joined by SolarWorld Americas Inc., an Oregon manufacturer that is a subsidiary of the insolvent German firm SolarWorld AG, said a surge of imports has decimated the domestic solar manufacturing industry. It is therefore asking the U.S. International Trade Commission to recommend that President Donald Trump set tariffs and minimum prices on all imported solar cells and modules made from crystalline silicon. An opening hearing in the case is scheduled for Aug. 15 in Washington, D.C.

"We don't know what will be the outcome of this [trade case] and also what kind of remedies will be implemented or whether there will be [remedies] at all," Qu said.

The company, which shipped 1,745 MW of solar panels during the second quarter and energized solar power plants totaling about 109 MW, reported second-quarter net income attributable to the company of $38.2 million, or 63 cents per share, down from $40.4 million, or 68 cents per share, in the year-earlier period. Revenue fell by 14% year over year to $692.4 million.

The Americas accounted for about 22% of the company's total revenue during the quarter, Qu said.

Canadian Solar shares fell by 3.26% on Aug. 14 to close at $16.64.