US solar tariffs could drive Asia transition boom

Massive caller tarrifs could deed star panels made successful Southeast Asia from June. Photo: STR / AFP/File
Source: AFP

Massive planned US duties connected star panels made successful Southeast Asia could beryllium a accidental for the portion to ramp up its ain long-stalled energy transition, experts say.

Earlier this month, Washington announced plans for hefty duties connected star panels made successful Cambodia, Vietnam, Thailand and Malaysia.

The levies travel an investigation, launched earlier US President Donald Trump took office, into "unfair practices" successful the countries, peculiarly by Chinese-headquartered firms.

If approved adjacent month, they volition heap upon tariffs already imposed by the Trump administration, including broad 10-percent levies for astir countries, and 145 percent connected Chinese-made goods.

For the US market, the consequences are apt to beryllium severe. China makes 8 retired of each 10 star panels globally, and controls 80 percent of each signifier of the manufacturing process.

The caller tariffs "will practically marque star exports to US intolerable commercially", said Putra Adhiguna, managing manager astatine the Energy Shift Institute deliberation tank.

Southeast Asia accounted for astir 80 percent of US star sheet imports successful 2024.

And portion concern successful star accumulation has ramped up successful the United States successful caller years, the marketplace inactive relies heavy connected imported components.

For Chinese manufacturers, already dealing with a saturated home market, the raft of tariffs is perchance precise atrocious news.

Many shifted operations to Southeast Asia hoping to debar punitive measures imposed by Washington and the European Union arsenic they effort to support and nurture home star industries.

The projected caller duties scope from astir 40 percent for immoderate Malaysian exports to an eye-watering 3,521 percent for immoderate Cambodia-based manufacturers.

Tariffs 'accelerate' modulation

But determination whitethorn beryllium a metallic lining for the region, explained Ben McCarron, managing manager astatine Asia Research & Engagement.

The stock of star compartment exports to the US from Cambodia, Malaysia, Thailand and Vietnam. Photo: Nicholas SHEARMAN / AFP
Source: AFP

"The tariffs and commercialized warfare are apt to accelerate the vigor modulation successful Southeast Asia," helium said.

China volition "supercharge efforts" successful determination markets and propulsion for argumentation and implementation plans to "enable accelerated adoption of greenish vigor crossed the region", driven by its exporters.

Analysts person agelong warned that countries successful the portion are moving excessively dilatory to modulation from planet-warming fossil fuels similar coal.

"At the existent pace, it (Southeast Asia) risks missing retired connected the opportunities provided by the declining costs of upwind and solar, present cheaper than fossil fuels," said vigor deliberation vessel Ember successful a study past year.

For example, Malaysia relied connected fossil fuels for implicit 80 percent of its energy procreation past year.

It aims to make 24 percent from renewables by 2030, a people that has been criticised arsenic retired of measurement with planetary clime goals.

The tariff authorities represents a treble accidental for the region, explained Muyi Yang, elder vigor expert astatine Ember.

So far, the section star industry has been "largely opportunistic, focused connected leveraging home resources oregon labour advantages for export gains", helium told AFP.

Many Chinese manufacturers moved to Southeast Asia to debar US commercialized restrictions. Photo: Lillian SUWANRUMPHA / AFP/File
Source: AFP

Cut disconnected from the US market, it could alternatively absorption connected section vigor transitions, speeding greenish vigor uptake locally and driving a caller marketplace that "could service arsenic a earthy hedge against outer volatility".

Still, replacing the US marketplace volition not beryllium easy, fixed its size and the comparatively nascent authorities of renewables successful the region.

"Success hinges connected turning this export-led momentum into a homegrown cleantech revolution," said Yang.

"Clearance prices" whitethorn beryllium charismatic to some, but countries successful the portion and beyond whitethorn besides beryllium cautious astir a flood of solar, said Adhiguna.

Major markets similar Indonesia and India already person measures successful spot intended to favour home star production.

"Many volition hesitate to import massively, prioritising commercialized equilibrium and aims to make section greenish jobs," helium said.

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Source: AFP