The initial ruling had some of them pay the highest rate of 27.55% and the lowest rate of 11.45%, while the rest would have to pay 19.5%. The adjustments made after the review cut the highest rate down to 4.2% and the lowest rate down to 3.5%. The majority of Taiwanese suppliers, however, now pay a rate of 4.09%.

“Taiwanese PV enterprises Sino-American Silicon Products (SAS) and Solartech Energy are the winners coming out of this review because their rates are now the lowest,” said Corrine Lin, assistant research manager for EnergyTrend, a division of TrendForce. “The rate adjustment furthermore strengthens other advantages that SAS has. Among Taiwanese manufacturers, SAS is the leader in PERC production capacity and has its own branded module products.

Two other competitors Neo Solar Power (NSP) and Tainergy did not participate in the review, so their AD rates – both were levied 19.5% last year – remain unchanged. To survive, NSP and Tainergy will have to accelerate the rollout of competitive products in their overseas facilities outside China and Taiwan.

Lin also pointed out that during the past two years many first-tier, vertically integrated Chinese PV enterprises have established production facilities in Southeast Asia because importing from there will not be subject to antidumping and countervailing tariffs. As a result, there is now an abundance of products from Southeast Asia for downstream customers to choose from.

“Furthermore, the average price of multi-Si modules for utility-scale PV power plants in the U.S. has now fallen to a low of US$0.35~0.37 per watt,” Lin added. “Under this context, manufacturers that have their total tariff rates significantly cut will not necessarily become more competitive against manufacturers that have overseas production bases and are able to evade tariffs altogether.”

On the other hand, Taiwanese cell suppliers with lower AD rates can be more effective in promoting their mono-Si and mono-Si PERC products, which have become popular since the last year’s Solar Power International trade show in the U.S. While first-tier manufacturers in China have started to increase their PERC exports to the U.S. since the fourth quarter of 2016, their production capacities for the technology, particularly in their overseas facilities, are still relatively low. There are non-Chinese competitors such as Hanwha Q CELLS, SolarWorld and REC Solar that have technologically matured mono-Si PERC products and can sell them without being subjected to high tariffs.

However, their combined mono-Si PERC capacity is currently less than 2 gigawatts. Therefore, Taiwanese suppliers of mono-Si and mono-Si PERC products can have a more advantageous position following the rate reduction.

At the present, the average price of mono-Si PERC modules in the U.S. rooftop market is around US$0.38~0.45 per watt. Those Taiwanese cell suppliers with AD rates in the range of 3.5~4.2% will achieve profit by assembling and exporting their PERC modules to the U.S.

However, EnergyTrend also believes that the rate adjustment following the review will give high-efficiency cells (including PERC products) only a temporary boost in terms of profit margin as the mono-Si and PERC capacities in Southeast Asia will expand eventually.

In the past several years, Taiwanese PV enterprises have missed the opportunity to develop their own branded modules during periods of no AD tariff or low AD rates from the U.S. Consequently, they became much less competitive when other major manufacturers started to establish production facilities overseas.

Now, Taiwanese manufacturers are concentrated in the cell section of the global PV supply chain. They face challenges both in developing the downstream market and in securing mono-Si wafer supply from upstream suppliers. While Taiwanese cells have advantages in conversion efficiency and product quality, they do not have much room for further margin growth.

“Taiwanese PV enterprises will try to find opportunities that come from the lowering of AD rates and the relative immaturity of PERC production in Southeast Asia,” said Lin.

“At the same time, they will need to find ways to maximize the use of their mono-Si and PERC capacity. Expanding into downstream is an imperative as opposed to relying on cell exports to the U.S. The price differences between high-efficiency and conventional products will continue to narrow, so margins for Taiwanese cells will also shrink in the long run. As for first-tier module suppliers, they will likely to keep building up production capacity in countries that are not the targets of high tariffs.”