Indonesian solar panel manufacturers brush off potential US tariffs

The Star

5 days ago

JAKARTA: Solar panel manufacturers in Indonesia are not overly concerned that their United States counterparts have filed trade petitions with Washington that might result in new tariffs, provided that Jakarta pushes for greater domestic adoption of solar photovoltaic systems.
Beny Sulaiman, business development and commercial director at PT Jembo Energindo, told The Jakarta Post on Wednesday (July 30) that 'the concerns in Indonesia are relatively small' since the domestic market could absorb locally made solar panels, as long as the government supported this.
'Indonesia is a big country with abundant market potential for renewables. On top of that, the government has been very supportive in significantly increasing [the share of] renewables in the [national] energy mix,' said Beny, who is also an executive at the Indonesian Solar Module Manufacturers Association.
The trade petitions, which seek to impose antidumping and countervailing duties, were filed earlier this month by the American Alliance for Solar Manufacturing Trade Committee, according to a Bloomberg article.
The group includes major US-based manufacturers like First Solar, Mission Solar Energy and Qcells. The plaintiffs allege that Chinese solar panel producers are flooding the US market with unfairly cheap goods made in factories in Indonesia, Laos and India.
The petitions' filing has kicked off a process in which the Commerce Department has 20 days to decide whether to investigate the allegation that imports are unfairly priced or subsidised by a foreign government.
Separately, the US International Trade Commission is to determine whether the imported solar panels harm domestic competition.
If the commerce and trade authorities conclude that the imports are unfair and injurious. Washington might impose new duties on foreign-made solar panels.
This process played out previously in April, when the US government imposed import duties of 3,521 per cent on certain solar power equipment from Cambodia, a year after the same industry alliance petitioned for protection of its members' operations.
Three other South-East Asian countries, Malaysia, Thailand and Vietnam, were also imposed US duties of varying rates, depending on the manufacturer and the products' origin. China-based Trina Solar was subject to a 375 per cent tariff for its products manufactured in Thailand, while China's Jinko Solar was slapped with a 41 per cent tariff on its Malaysian-made products.
The US imported solar equipment from the four countries totaling almost US$12 billion, the BBC reported in April, citing US Census Bureau figures. The antidumping and countervailing duties have caused a massive shift in the US solar industry supply chain, prompting an immediate decline in shipments from Cambodia, Malaysia, Thailand and Vietnam in May, with Indonesia and Laos picking up the slack.
Indonesia and Laos saw its solar panel exports to the US balloon to 44 per cent in May from a figure of just 1.9 per cent n May 2024, Bloomberg reported. Meanwhile, India's solar panel exports to the US have been on the rise since 2022.
Many Chinese firms have moved their operations to South-East Asia in recent years in a bid to avoid US tariffs since President Donald Trump's first term in 2017-2021. Anindya Bakrie, chairman of the Indonesian Chamber of Commerce and Industry (Kadin), and Shinta Kamdani, chairwoman of the Indonesian Employers Association (Apindo), both said they had not yet caught up with the matter when the Post contacted them for comments on Tuesday.
Fabby Tumiwa, executive director of the Institute for Essential Services Reform, told the Post on Wednesday that US solar manufacturers had filed the trade petitions because they were unable to compete with imported solar products. 'The production cost of solar modules in the US is higher than in other countries. Compared to Southeast Asia, China or India, they're far more expensive,' he said.
According to Fabby, Chinese solar technologies from were 60 per cent cheaper than those produced in the US. Likewise, Indian and South-East Asian solar panels cost only 20-30 per cent more than those made in China.
Fabby suggested that US solar manufacturers were 'under heavy pressure', given that they had only recently commenced production and had therefore 'not reached the economies of scale'.
Meanwhile they faced short deadlines, according to Fabby, who said manufacturers had to break even in three years as the industry was advancing rapidly, with new and more efficient solar technologies pushing out previous generations in a cycle of three to five years.
'If they cannot break even in three years, they'll certainly be left behind, because the Chinese move very fast,' he said. 'That's why it's in [US manufacturers'] best interest to shave imports, so they can utilise domestic capacity.'
The condition of US solar manufacturers has been exacerbated by the 50 per cent import tariffs the Trump administration has imposed on aluminum and steel, two important precursors for solar technology, driving production costs even higher.
While the pressure on the US solar industry was understandable, 'it's unfair to blame other countries [where] production costs are lower', said Fabby, adding that Indonesia's solar panel manufacturers had achieved competitiveness fair and square, without any government subsidies. - The Jakarta Post/ANN