For some time, U.S. module prices have been significantly higher than the global average. Despite recent module factories coming online the U.S. market is still highly dependent on imports, and tariffs are currently adding 25% to the cost of any imported modules.
But even this does not fully explain the higher cost of PV modules in the U.S. market, which PV InfoLink puts at 40.4 cents per watt on the spot market for 305 watt modules based on monocrystalline cells with Passivated Emitter and Rear Cell (PERC) technology. This is 13 cents per watt higher than spot market prices for the same product in the EU or Australia.
Some of this may be the intense demand, with the utility-scale solar market booming as developers and their customers rush to take advantage of the full 30% Investment Tax Credit.
Either way, in a research note issued following the news that bifacial modules would be exempted from tariffs, Roth Capital stated that the new exemption could drive down the cost of PV modules in the U.S. market.
This comes with some caveats. Roth Capital expects most of the new bifacial capacity coming into the U.S. market to come from Southeast Asia, and while multi- or monocrystalline silicon wafers can be used for bifacial, mono PERC cells are the most popular. Roth notes that mono PERC capacity in Southeast Asia remains “highly constrained”, and says that lines will need to be modified to make bifacial products.
A tight market
This could be a breath of fresh air for a U.S. module market which has struggled with tight supply. Roth not only estimates that mono PERC modules are currently priced in the “mid-40s cents per watt” in the United States, but that such modules are effectively sold out for the next few quarters.
The arrival of tariff-free bifacial supply will not mean that U.S. module prices will suddenly drop to international levels. In its analysis of pricing, Roth estimates that the cost of manufacturing in Southeast Asia is 2 cents per watt higher than China, and that when the added costs of logistics, warranties and bifaciality are factored in, even without the Section 201 tariffs bifacial modules should still cost 37 cents per watt in the United States.
As new U.S. factories come online and ramp, this could certainly help out. Hanwha Q Cells’ new factory in Georgia is currently ramping up to its 1.7 GW of annual capacity, and began shipping product in March. JinkoSolar is also ramping 400 MW of module capacity in Jacksonville, Florida, and LG is ramping a 500 MW factory in Alabama.
First Solar’s 1.2 GW factory in Ohio is not set to come online until the end of this year, but even if it does, it is not as though the modules it makes will be easily available, given that First Solar is sold out into 2021.
When these four factories all come online they will total 3.8 GW of annual capacity. Even when smaller U.S. factories are added in pv magazine still estimates less than 5 GW of domestic module capacity. This is less than half of demand levels in 2018, let alone the booming 2019 market.
Even with its new the price advantage, it is not clear that bifacial products will suddenly sweep the U.S. market. For space-constrained rooftop applications, high efficiency products like SunPower’s back-contact modules and LG’s NeoN2 are still very popular, and most but not all consumers are seeking aesthetically pleasing products like all-black modules.
In utility-scale applications, bifacial is being more widely adopted, as the 224 MWdc Southern Oak project and the inclusion of bifacial in Canadian Solar’s recent mega-module deal with EDF suggest. And as this tariff exemption is expected to make bifacial cheaper than mono-facial products in the United States, we could see bifacial in more places, such as the commercial roof-mounted segments.
But while there are clear advantages to bifacial technology, these are hard to quantify. In a recent interview with pv magazine PV Evolution Labs CEO Jenya Meydbray noted that there is still no globally agreed-upon standard for testing the output of bifacial modules, and widely varying claims are being made.
Either way, we can expect literal boatloads of bifacial modules to be coming into the U.S. market, and for this to have benefits beyond even those projects where they are deployed.
Update: This article was updated at 11:10 AM Eastern Time to provide clarity on the progress of ramping at Hanwha Q Cells’ factory in Georgia. This article was further updated at 3:55 PM Eastern Time to clarify that LG is currently ramping its Alabama factory.