Chinese solar companies are turning their attention to emerging markets in Indonesia and the Middle East as the United States intensifies trade restrictions on imported photovoltaic products from various regions, analysts said.

In early December, the US made a preliminary decision to impose antidumping tariffs of up to 271 percent on solar products from four Southeast Asian countries — Cambodia, Malaysia, Thailand and Vietnam — where many Chinese solar firms had already established production capacities. Later, Washington announced that starting Jan 1, tariffs on imported silicon wafers and polysilicon from China will soar to 50 percent.

Despite escalating trade conflicts, Tan Youru, a solar analyst at research provider BloombergNEF, said: "Apart from the US and Indian markets, most solar installations in other regions rely heavily on Chinese-manufactured products. Regions beyond the four Southeast Asian countries ... are poised to emerge as attractive new hubs for Chinese solar firms in the near term."

BloombergNEF said Chinese solar product manufacturers have already set up production facilities in Indonesia this year, boasting 6 gigawatts of solar cell capacity and 15 GW of module capacity.

"Indonesia currently falls outside the US's new scope of antidumping and antisubsidy tariffs imposed on Southeast Asian countries. Indonesia also mandates a certain level of local manufacturing requirements in foreign-invested solar projects, although these local content requirements have been eased this year," Tan said.

Chinese investments in renewable energy across the Middle East have also garnered attention. A recent report from global accounting firm EY revealed that Chinese investments in solar and wind energy in League of Arab States economies surpassed $13 billion between 2018 and 2023, constituting 24 percent of total investments. The report said Chinese companies are actively expanding their footprint in the renewable energy value chain, encompassing photovoltaic modules, wind power components and others.

Regarding the heightened US tariffs on silicon wafers and polysilicon from China, Tan said the limited US silicon wafer manufacturing capacity and negligible existing crystalline silicon cell manufacturing capacity indicate that increased US tariffs may have minimal impact on the Chinese solar sector.

"In the US, the focus lies on importing solar cells and modules rather than solar polysilicon and wafers. The limited cell manufacturing capacity in the US results in minimal demand for silicon wafers and polysilicon upstream in the production chain.

"Despite significant subsidy support from the US Inflation Reduction Act, and the country's trade protections, its establishment of silicon wafer and polysilicon manufacturing facilities still faces challenges, and the current focus of US solar product manufacturing remains on module manufacturing," Tan added.

The US-based Solar Energy Industries Association reported a significant increase in domestic module manufacturing capacity of 9 GW in the third quarter to nearly 40 GW this year, up from less than 7 GW in the second quarter of 2022 before the enactment of domestic manufacturing and procurement tax credits.

The first US cell manufacturing facility since 2019 opened in the third quarter, said the SEIA.

Lin Boqiang, head of the China Institute for Studies in Energy Policy at Xiamen University, pointed out that unlike solar module manufacturing — which can be quickly expanded through investments — solar cell and silicon wafer manufacturing involve complex technological inputs, presenting challenges for rapid expansion.

A report from Eastmoney Securities indicates a shortage of domestically manufactured cells in the US may persist for two to three years.

China's JA Solar, which was slapped with a hefty 53.30 percent duty on solar products manufactured in Vietnam, told China Daily that it is now seeking new sites for localized production aside from Southeast Asia and the US.

During the first-half performance briefing in September, Chinese solar company LONGi's Chairman Zhong Baoshen had expressed concerns over possible US tariffs impacting the global trade landscape. Zhong said there might still be a market for cell manufacturing and exports to the US from Malaysia and Thailand, despite the two countries perhaps having limited opportunities to export modules if the US makes the final decision to raise tariffs.