With Donald Trump in the White House, the global solar industry has had to be quick on its feet. There have been no less than three major trade actions that have affected the solar industry, and the latest – retaliatory tariffs on China under Section 301 – have continued to balloon to more and more products, as well as potentially higher rates.
As the latest, last week U.S. Trade Representative Robert Lighthizer announced that he had been instructed by President Trump to consider increasing duty rates on the hundreds of different products under the latest round of proposed Section 301 tariffs from 10% to 25%. This list includes inverters as well as AC modules and non-lithium batteries.
And while a large portion of the world’s inverters are made in China, many large inverter companies have manufacturing sites in multiple nations. “From a vendor perspective, many of the major inverter suppliers have non-China options,” GTM Research Global Lead of Renewables and Emerging Technologies MJ Shiao told pv magazine.
Shiao says that three companies will be most affected by these tariffs: Enphase, Chint and Huawei, which is the world’s largest inverter maker by volume shipped. However, at least two of these three companies are or were already making plans to manufacture in locations outside China, which could mute the affects of the tariffs.
Enphase currently makes all of its microinverters in China, via a contract manufacturer. However in the company’s latest results call Enphase CEO Badri Kothandaraman revealed that the company is planning to use a second original equipment manufacturer (OEM) located outside of China.
As for Chint, the company was already well on its way to establishing manufacturing in the United States, with initial pilot manufacturing in Texas as it looks for a location in the U.S. Midwest for larger-scale operations.
Ed Heacox, the general manager at Chint Power Systems Americas says that this search has been narrowed down to locations “in a few target states”, and that the Texas facility will be rolling assembled 50-60kW inverters off of its lines in Texas as early as September. He also says that customers ordering inverters this month will come in ahead of any tariffs.
“By the time a tariff is implemented, we will have mitigated some of the cost burden and will be able to share savings that with active customers that plan projects closely with us,” Heacox told pv magazine. “We are engaging active customers assertively to help them avoid, or at least delay cost burdens.”
Huawei did not respond to pv magazine‘s request for comments by press time. Another market leader among Chinese inverters makers, Sungrow, was not listed among those inverter makers most likely to be affected by the tariffs. This may be due to the company recently opening a 3 GW inverter factory in India.
GTM Research’s Shiao notes that even at 25%, the system-level impact of any tariffs on inverters will be minor, but that the market disruption caused by several ongoing trade actions may be the real problem. “The bigger challenge is the continued cost uncertainty from all of these trade policies,” explained Shiao.
“The U.S. has AD/CVD tariffs, Section 201, Section 232 on steel (affecting tracker prices) and now these tariffs. Cost projections for solar has never been simple with the base market dynamics and the continued surprise and threat of new tariffs creates unnecessary uncertainty in supply chains and cost planning.”
Update: This article was updated at 10:20 AM EST on August 6 to include a reference to Sungrow’s factory in India.
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