Key Takeaways:
Three U.S. solar panel makers asked trade officials to investigate cell imports from South Korea, alleging Hanwha Corp.'s Qcells unit is using them to evade longstanding tariffs on Chinese products, according to a petition viewed by Reuters.
The complaint, filed June 22, targets a surge in South Korean solar cell shipments that the petitioners argue are largely composed of Chinese-origin wafers processed with minimal value addition in Korea. The probe request comes as the Biden administration's 50% Section 232 tariffs on steel and aluminum imports have already squeezed South Korean small manufacturers, with a Korea Federation of Small and Medium Business survey showing affected companies faced an average tariff increase of 16.2 percentage points.
Hanwha Qcells, one of the largest solar manufacturers operating in the U.S., has expanded its Georgia factory to produce 5.1 GW of modules annually, making it a dominant supplier to American utility-scale projects. The petition alleges the company's cell sourcing strategy exploits a loophole that allows Chinese-made wafers to be shipped through South Korea with minimal processing before entering the U.S. as Korean-origin cells.
If the U.S. Trade Representative opens an investigation and ultimately imposes duties, the cost of solar modules could rise sharply for U.S. developers already grappling with supply chain uncertainty. The petition threatens to disrupt the clean energy supply chain at a time when the Inflation Reduction Act's Section 45V tax credits are driving record solar deployment, with the U.S. expected to install more than 40 GW of new capacity this year.
A tariff on Korean cells would benefit domestic manufacturers such as First Solar Inc., which produces thin-film panels using a different technology not subject to the same trade disputes. But it would raise costs for project developers and independent power producers that rely on crystalline-silicon modules, the dominant technology in the market. The U.S. solar industry imported about $3.5 billion worth of cells and modules from South Korea last year, according to trade data.
The petition adds to a growing list of trade actions targeting clean energy supply chains. The U.S. has already imposed anti-dumping duties on solar products from several Southeast Asian countries after similar circumvention allegations. A decision on whether to open the Korean probe is expected within 45 days.
This article is for informational purposes only and does not constitute investment advice.
