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On Tuesday, Citi provided insights into the solar industry, highlighting the impact of recent trade rulings on various companies. The final rulings are seen as largely detrimental for the coverage universe, particularly for Canadian Solar Inc. (NASDAQ:CSIQ), which faces a substantial increase in tariffs. First Solar Inc . (NASDAQ:FSLR), on the other hand, emerges as a beneficiary due to its U.S. presence and unique technology.
Canadian Solar, with cell manufacturing operations in Thailand, is now subject to a staggering 375% tariff, a significant leap from the prior 81%. This development places considerable pressure on the company, potentially affecting its competitive position and financial performance.
Furthermore, companies like Enphase Energy Inc . (NASDAQ:ENPH) and SolarEdge Technologies Inc . (NASDAQ:SEDG) may also encounter challenges, albeit indirectly. The increased costs for panels and the resultant supply chain disruptions are expected to impede installation rates, which could in turn influence their business operations and market outlook.
Citi also points to upcoming trade decisions, specifically the preliminary determination on active anode materials from China, expected in May. The imposition of significant tariffs in this area could lead to a sharp rise in Battery Energy Storage System (BESS) prices. This would pose additional challenges for companies like Fluence Energy Inc. (NASDAQ:FLNC), Enphase Energy, Sunrun Inc . (NASDAQ:RUN), and SolarEdge Technologies, potentially impacting their cost structures and profitability.
The trade rulings serve as a critical factor for the solar industry, shaping the competitive landscape and influencing company strategies. As the market responds to these regulatory changes, the affected companies may need to adjust their operations and financial planning to navigate the evolving trade environment.
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