As the global economy continues to recover, pandemic supply chain shortages have impacted industries all across America. From automobiles, to household items, to food or electronics, there is no denying that supply chain bottlenecks are posing barriers to returning to pre-pandemic-level markets. This article will provide our take on the current PV module supply chain with outlooks for the coming year and recommendations on how to secure access to inventory for your solar business.
The primary causes behind today’s supply chain issue lie within a complex web of government policies, tariffs, and regulations. That said, there are some key factors which are crucial to predicting future supply for the upcoming year.
The first is a major logjam at the Ports of Los Angeles and Long Beach, both of which together process around 40% of the United States’ total imports. As a result of stay-at-home orders in 2020, the demand for imported goods rose dramatically last summer, leading to an influx of seaborne shipping traffic in ports as companies were desperate to maintain their inventories. Coupled with virus-induced workforce issues and increasingly larger boat arrivals bringing more containers, moving yards have reached full capacity and there is simply no space to fit more vessels. This limits the ports’ capacity to accept more shipments and store the delivered product which furthers the supply constraint issues even when the product is en route.
In cooperation with the Biden Administration, the Ports of Long Beach and Los Angeles expanded to 24/7 operation this September to push the supply chain to move goods out of ports and onto highways, railroads, and warehouses. By signing on foreign-owned shipping companies and some of the nation’s largest retailers such as Walmart and Home Depot to commit to increasing operations during off-peak hours, economic recovery from these bottlenecks is predicted to move along by the holiday season.
In tandem with the US port bottleneck issue, other causes more directly impacting the PV industry have emerged to stoke uncertainty in module supply throughout the coming quarter. Module supply has been constrained since efforts began in 2018 to limit the import of solar cells and modules from the rest of the world. Further constraining the market, the US Customs and Border Protection released an order this June to keep a closer watch on manufacturers shipping silicon-based goods into the US. This order includes placing a hold at the border for some products until certain manufacturing details have been provided, forcing some manufacturers to delay deliveries into the first or second quarter of 2022.
Multiple module manufacturers have adapted their supply strategies in response to these challenges. JinkoSolar has embarked on the development of a new monocrystalline ingot and wafer manufacturing facility in Vietnam. U.S polysilicon is shut out of the China market due to high tariffs, and China owns 97% of the world's ingot capacity, which consumes polysilicon. The new JinkoSolar plant outside China will immediately double the global non-China capacity for ingot manufacturing. With this new fully non-China supply chain, which will be audited by third parties, Jinko plans to lock in product availability for customers by ensuring a reliable, high-quality supply flow, particularly to one of its major module production facilities in Jacksonville, FL.
LG Solar’s opening of a brand new factory in Huntsville, Alabama in 2019 serves a similar purpose to stabilize domestic supply. The Huntsville LG plant boasts regional employment opportunities, lower transportation costs, and efficient access to local service representatives. Hanwha Q Cells has assured audits of their global supply chain to address challenges regarding polysilicon sourcing as part of their corporate sustainability policy. Along with Hanwha Q Cells, REC Silicon has worked with companies within the Ultra-Low Carbon Solar Alliance to focus on more localized solar manufacturing and serve domestic demand with their 2 US-based facilities.
As the industry's leading module manufacturers look to alternative supply strategies to best accommodate increasing demand in the US amidst unprecedented supply chain constraints, we at Greentech Renewables are poised to bring our customers unmatched product access across the entire country. While there is no denying the supply chain challenges our industry faces today, taking advantage of our premier network of top global PV module suppliers ensures that when you order through Greentech Renewables, our unmatched service, logistics, and extensive inventory are at your fingertips. Connect with your local Greentech Renewables rep today to learn how you can maximize your PV business this season.
Comments
Excellent article. Great insights.