The U.S. Department of Commerce (DOC) has clarified the scope of the anti-circumvention investigation, saying that it will allow the import of solar modules assembled in non-Southeast Asian countries using solar cells manufactured in Southeast Asian countries.

The clarification comes as a relief to many international manufacturers exporting to the U.S. who assemble solar modules using cells manufactured in the Southeast Asian countries mentioned in the probe.

The department’s preliminary anti-circumvention probe findings published just weeks ago found that some cells and modules exported from Cambodia, Thailand, Malaysia, and Vietnam used wafers produced in China. It was akin to evading the anti-dumping and countervailing duties in place for Chinese imports.

The DOC has clarified that the solar cells made in any of the four Southeast Asian countries under investigation, even if made with wafers from China, that are then exported to a different country and further assembled into modules or other products will not be considered exports from these four countries.

The clarification was issued in response to queries raised by several parties seeking clarity on the coverage of the preliminary determinations.

Trade groups in the country had criticized the investigation citing the direct impact on the pipeline projects in the country, as the domestic manufacturing capacity is still ramping up to meet the increasing demand.

Due to the rising COVID-19 cases in China, solar supply chains are likely to be further strained. Most countries are either in the process of ramping up their domestic manufacturing capacities or considering alternative module procurement options for their upcoming projects.

India, where module manufacturing is still in its nascent stage, imports most of the wafers that are used in solar cells from China. For Indian manufacturers, importing wafers from China and solar cells from Southeast Asian countries, the clarification presents a window of opportunity for module exports to the U.S.

The DOC’s circumvention findings do not cover solar cells and modules produced in countries other than the four countries under investigation.

Mercom had recently reported on the rise in India’s solar module exports to the U.S. due to the ban on China-manufactured cells and modules.

According to a recent report by Wood Mackenzie and Solar Energy Industries Association, solar installations in the U.S. dropped 17% year-over-year in the third quarter of 2022, with 4.6 GW of cumulative capacity installed during the period. The report attributed the drop to the delay in approvals for the stranded shipments of solar equipment subjected to inspection under the U.S. Customs and Border Protection.