Analysts Say at Least Three UFLPA Detentions in Solar So Far
A Bank of America Securities research note said analysts believe the Uyghur Forced Labor Prevention Act has been a "greater challenge than expected" for solar panel manufacturers, and at least three different suppliers' shipments have been detained in the first month since the law began to be enforced.
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The note, published July 20, said it's too early to predict declines or delays in panel installations, but the analysts will be monitoring companies' compliance procedures, "as some suppliers seem unprepared." They said even with the executive order delaying any deposit collection related to circumventing antidumping or countervailing duty orders, panel exporters "must get through UFLPA and WRO requirements, which is not guaranteed."
"We suggest UFLPA guidelines are more cumbersome than we appreciated and may cause delays to module imports into the US," the analysts wrote.
The analysts wrote that the Hoshine withhold release order has largely been surmounted by importers. "Our conversations suggest an estimated 140 MW of modules were detained between the summer and fall of 2021, which contributed to a decrease in imports during the period. As we understand it, much of the detained imports were released after meeting audit compliance requirements, but these detained shipments were held for three to eight months, depending on individual shipment documentation and audit. Through spring of this year, it seems much of the industry has adapted to complying with the Hoshine Silicon WRO," they wrote.
For context, the estimated amount of panels detained was less than 1% of 2021 solar panel imports.
The analysts said that given the risk that AD/CVD rates for Chinese exports could be applied to Southeast Asian production in 2024, and given that the Commerce Department seems to be focusing on wafers rather than cells as the first step of substantial transformation, Jinko, LONGi and Trina are building ingot and wafer capacity outside of China.