Hanwha Solutions eyes earnings boost from tariffs, capacity expansion

Hanwha Solutions is emerging as a prime beneficiary of surging solar power demand driven by AI, as the timing of its expanded US factory output aligns with the imminent rollout of American tariff measures designed to protect domestic manufacturing.

According to securities industry sources, Hanwha Solutions told brokerages at a recent investor relations session that prices across the solar value chain — including modules — are expected to rise after Section 232 of the Trade Expansion Act takes effect in December.

"In 2027, the implementation of Section 232 will push up module prices in the US market, and Hanwha Solutions' blended average selling price will rise alongside increased module production and sales," said Choi Young-gwang, an analyst at NH Investment & Securities.

Section 232 allows the US government to impose tariffs or price restrictions on specific imports on national security grounds. Under the measure, solar cells and modules imported into the United States will face a 15 percent tariff starting in December.

With cheap imported modules blocked, domestic prices are expected to climb — a development that stands to benefit Hanwha Solutions, which manufactures modules locally. The company operates Solar Hub, a solar production complex in Georgia that serves as the largest solar manufacturing base in North America. The facility produces 3 GW of ingots, wafers and cells annually, along with 8.6 GW of modules.

"The Cartersville cell facility, currently in ramp-up, is on track to reach full operation between the end of the third quarter and the start of the fourth, completing a vertically integrated wafer-cell-module supply chain within the United States," Choi said.

The completion of the Solar Hub expansion this year is also expected to broaden local production tax benefits. "The company will be able to produce Domestic Content Adder modules, which command higher selling prices, while also collecting larger Advanced Manufacturing Production Credit payments," Choi said. The Domestic Content Adder is a tax credit for solar projects using US-made components, while the Advanced Manufacturing Production Credit is a separate credit for renewable energy manufacturers.

Hanwha Solutions received a combined 1.3 trillion won ($956 million) in Advanced Manufacturing Production Credits from 2023, when Solar Hub began operations, through 2025. NH Investment & Securities projects the credit will reach 952 billion won this year and grow to 1.23 trillion won next year.

US government-led grid expansion to support solar demand is also continuing.

"Co-location orders will be approved from late 2025, and Large Load show cause orders related to large-scale power loads are expected to be approved during 2027," said Jeon Woo-je, an analyst at KB Securities. These measures reflect US government efforts to expand grid interconnection and streamline power transmission procedures under its AI investment push.

Jeon added that demand for new power plants within the US grid will increase incrementally from 2028, and projected that additional investment in Hanwha Solutions' capacity — currently at 10.9 GW — will follow in 2028 and 2029.

Riding the surge in AI-driven power demand, Hanwha Solutions returned to profit in the second quarter of this year and is expected to sustain the upward earnings trend. The company posted operating profit of 360.5 billion won in the second quarter, up 200.3 percent from a year earlier and 231.0 percent from the previous quarter. The average operating profit forecast for Hanwha Solutions in the third quarter of this year, compiled by financial data provider FnGuide, stands at 208.3 billion won.