CBP Rules Company's Solar Cells and Panels Aren't Eligible for Partial Duty Exemption
A March 2025 CBP ruling has determined that a partial duty exemption in the tarif schedule for U.S.-origin materials exported to a third country for assembly will not apply to certain U.S.-origin crystalline silicon wafers exported to a third country for assembly into solar cells and panels.
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The ruling, HQ H340672, is based on a request from an unnamed company in July 2024, asking the agency to rule on the applicability of subheading 9802.00.80 to certain solar cells and solar panels. The company uses U.S.-origin polysilicon raw material to eventually produce crystalline silicon wafers, according to the ruling. It then exports the wafers to a third country where the wafers are assembled into solar cells. These solar cells may be exported back to the U.S., or they may undergo further assembly into solar panels, and these solar panels are exported back to the U.S.
The company argued that the texturing process that takes place to make solar cells and solar panels from the crystalline silicon wafers "is not significant" under the U.S. goods assembled abroad provision because "it consists merely of 'trimming, filing, or cutting off of small amounts of excess materials' from the wafer surface to reveal pre-existing pyramidal structures, along with various 'cleaning” steps," the filing said.
But CBP disagreed with the company's assessment, saying that the chemical treatment performed during the texturing process imparts new characteristics.
"Texturing the wafer is about more than simply removing or trimming a small portion of the wafer surface. By texturing the surface of the wafer with chemical additives through anisotropic etching, more light becomes trapped as the number of hills and valleys on the surface increase. Otherwise, if the surface of the wafer is too smooth, light would bounce off, thus impeding the proper functioning of the solar technology. Thus, texturing imparts significant new characteristics on the wafer that enable greater photon capture, an important characteristic necessary for the proper functioning of solar technology," CBP said.
While the unnamed company "asserts that texturing is incidental because it does not chemically alter the wafer or give it new chemical characteristics, this is a misreading of the regulatory language," CBP continued, citing requirements addressing new characteristics that come about by chemical treatment. Because the use of chemical additives through anisotropic etching creates pyramidal structures on the surface of the wafer, "texturing is not incidental to the assembly process and constitutes a significant operation necessary for the fabrication, completion, physical or chemical improvement of the wafer."
Because of this conclusion, CBP found that the solar cells and solar panels at issue would not be eligible for a partial duty exemption under subheading 9802.00.80.