While domestic solar cell and module corporations have been riding the U.S.-China conflict to notch windfall gains and accelerate their push into the U.S. market, the domestic market itself appears to have been taken over by Chinese products. The United States continues to tighten import restrictions targeting Chinese solar products and supply chains, but Korea effectively has no import restrictions on Chinese products.
◇ Korea's solar cell exports jump 90%… all to the United States
According to Korea International Trade Association statistics (K-Stat) on the 29th, solar cell exports from January to July this year totaled $488,149,000 (about 675 billion won), up 90% from a year earlier.
Most solar cells were sold to the United States. Solar cells exported to the United States through July this year amounted to $483,811,000 (about 669 billion won), accounting for 99% of total exports.
As the U.S. government tightened import restrictions aimed at the Chinese solar supply chain, Korean corporations appear to have benefited by touting U.S. local production and non-Chinese supply chains.
Hanwha Solutions recorded a utilization rate in the 90% range in the solar cell institutional sector at its Jincheon plant in North Chungcheong, the domestic solar production base, in the first half. Hanwha Solutions sends all the solar cells made at the Jincheon plant to Solar Hub, an integrated solar production base in Georgia.
Solar Hub is a complex with an annual production capacity of 8.4 gigawatts (GW) of solar modules. It is cited as the only place in North America that makes everything from basic solar materials to finished goods modules.
Rising U.S. sales improved results. In the second quarter of this year, Hanwha Solutions' Qcells institutional sector posted 2.4823 trillion won in revenue and 166.4 billion won in operating profit, up 71% and 168%, respectively, from a year earlier. The United States accounted for 54.7% of total revenue.
HD Hyundai Energy Solutions also posted its biggest-ever quarterly profit in the second quarter. On a consolidation basis, second-quarter revenue was 165 billion won and operating profit was 36.1 billion won, up 23.4% and 139.8%, respectively, from a year earlier. In particular, with a sharp increase in sales to the United States, the United States accounted for 40% of total revenue by region.
OCI Holdings returned to profit in the second quarter thanks to OCI Enterprises, its U.S. solar business holding company, selling a 500-megawatt (MW) solar project. OCI Holdings supplies polysilicon produced at its Malaysia plant to Solar Hub and is drawing attention as part of a non-Chinese supply chain.
With the Donald Trump administration set to implement trade measures in December that apply a 15% tariff and a minimum import price to polysilicon and derivative products, many expect conditions to become even more favorable for Korean corporations. If a minimum import price that blocks imports below a certain price is applied, Chinese corporations' low-price offensives could ease.
◇ Domestic solar market eroded by Chinese products
By contrast, the domestic solar market appears to be eroded by Chinese corporations. More than 90% of the solar cells Korea imports are Chinese products.
The total volume of solar cells brought into Korea from January to July this year was $79,735,000 (about 110.3 billion won), up 60.8% from a year earlier. Of that, 91% were solar cells imported from China.
Unlike the United States, the domestic solar market has no trade restrictions, allowing lower-priced Chinese products to sweep the market. Chinese products are estimated to account for about 95% of domestic solar cells and 60% of modules.
The small size of the domestic solar market and the difficulty of imposing sanctions in consideration of diplomacy with China appear to have contributed to the rising market share of Chinese products in Korea.
Experts say government-level support and greater demand for domestic products are needed to protect the domestic solar industry. Park Jong-seong, a professor of energy engineering at Gyeongsang National University, said, "Compared with China, Korea's solar installations are far too small, and because most are installed on a small scale, many use cheaper Chinese products," and added, "Government projects or large-scale installations mix in domestic products, but demand is not large."
Park said, "It is hard for domestic corporations to compete with China on unit price. Without U.S. government sanctions, survival is difficult," and added, "For government projects or large-scale power generation projects, alternatives such as using domestic products are needed."