According to Ellick Liao, chairman of solar cell and PV module manufacturer TSEC, the Inflation Reduction Act (IRA) may present opportunities for Taiwan-based PV companies to establish facilities in the US, but their investment decisions will depend on other factors in addition to IRA.
According to Liao, these factors include restrictions on Chinese manufacturers’ ability to establish factories in the US, anti-dumping and countervailing tariffs on PV products made in China, and the importation of PV modules from Southeast Asia, where Chinese manufacturers have established factories.
According to Liao, Taiwan-based solar cell and PV module manufacturers may invest in US production over a two-stage period if the regulatory environment is supportive. Given that PV modules are bigger and heavier, they might start by producing PV modules in the US before moving on to producing solar cells later, according to Liao.
The average roof area of a home in the US can support the installation of a PV system with an installation capacity of 50KWp, which is sufficient to meet the average daily power demand per household and power charging for 1-2 electric vehicles, as the IRA encourages households to install rooftop PV systems by offering a 30% investment tax credit (EV).
For the investment of Taiwan-based makers, Liao added, state government support is crucial in addition to IRA and regulations. Liao mentioned that the New York State Government, for instance, assisted Panasonic and Tesla in acquiring land in Buffalo for the construction of a joint-venture HIT (heterojunction with intrinsic thin layer) solar cell factory. He added that Taiwan-based manufacturers looking to establish factories in the US can use this example as a guide. Liao noted that Taiwanese manufacturers might be able to establish PV production hubs in a few US states.
According to Liao, the US government has given Southeast Asian PV module manufacturers a two-year exemption from anti-circumvention taxes. According to Liao, these manufacturers have been suspected of exploiting solar cells and PV components made in China to get around anti-dumping and countervailing taxes.
Given that the cost of producing solar cells for Taiwan-based manufacturers is significantly greater than that of their Chinese counterparts, Liao suggested that Taiwan-based manufacturers’ PV module factories in the US might use solar cells from Chinese manufacturers. However, Liao pointed out that given the US-China trade conflict, this is unlikely to be possible.
Liao said that although Chinese and South Korean PV manufacturers may build factories in the US, their competition with Taiwanese manufacturers would resume where it left off. He added that for US production, competition is based on human resource, yield rates, product quality, and solar cells’ ability to convert sunlight into energy rather than on the cost of equipment.
According to Liao, if Taiwan-based solar cell and PV module manufacturers open up plants there, their total annual production capacity for solar cells may reach 1GWp, while IRA is anticipated to generate demand in the US for at least 20GWp annually.
capacity strategy for TSEC
According to Liao, TSEC now has two M6, M10 solar cell production lines with a combined annual capacity of 700–800MWp and will gradually phase out its 600MWp annual G1 solar cell production capacity. According to Liao, TSEC will put up a specialized M10 solar cell production line in the first half of 2023 and may modify the two M6, M10 solar cell production lines as well.
In September, TSEC reported consolidated revenues of NT$773.3 million (US$24.6 million), up 3.78% from the previous month and 62.48% from the previous year. In the third quarter, consolidated revenues of NT$2.276 billion increased 20.49% sequentially and 61.87% from the previous year.
Ellick Liao, chairman of TSEC
Shih-ming Fu, October 20, 2022, DIGITIMES Asia