American PV module manufacturing reached a critical milestone this year, surpassing 50 GW of domestic capacity — enough to meet all annual U.S. demand. However, little has changed in the way PV module contracts are structured.
Most developers and IPP customers still rely on Delivered Duty Paid (DDP) incoterms — an approach inherited from the days of complex overseas supply chains, ocean freight rate volatility and importation risks like AD/CVD investigations, UFLPA compliance and Section 301 tariffs.
But today’s re-shored supply chains are much simpler. No importation risk. No $20k+ shipping containers. Just point-to-point shipments of full truckloads (FTLs) moving modules made in a U.S. factory to a U.S. jobsite. In this context, overpaying for DDP ‘certainty’ does not make sense anymore.
A recent 200-MW utility-scale project, managed under Ex Works (EXW) terms, illustrates just how much value is being left on the table.
The DDP disconnect
DDP freight terms are straightforward on paper: the PV module manufacturer delivers the product to site and includes logistics in the price. It removes perceived friction from the buyer’s side and provides buyers with a fixed price — but that simplicity comes with a hidden cost.
Manufacturers typically quote a flat $0.015/w or more for domestic delivery, regardless of the project’s location and distance from the factory. This rate is derived from the worst-case scenario, cross-country trucking under tight market conditions. It is designed to protect the manufacturers profit margin from market and operational risks. When the site is close to the factory, or delivery terms are flexible, this rate becomes vastly overstated.
And in a re-shored market where modules are produced in more than 15 states, transporting product coast-to-coast by truck isn’t just expensive — it’s misaligned with the sustainability goals of the solar industry.
Why developers default to DDP
Despite the clear cost delta, most developers still default to DDP. That’s not because DDP is the best option — it rarely is — it is because DDP feels safer, easier and more familiar.
- Perceived simplicity: DDP lets developers remove logistics from their to-do list. By bundling delivery into the module price, DDP reduces contract complexity and the number of counterparties. For small teams juggling multiple priorities this approach seems attractive. It shifts responsibility (on paper) to the manufacturer, even if the execution burden still lands with the developer when downstream issues arise.
- Limited bandwidth and logistics experience: Few developers have dedicated logistics teams. Most rely on procurement or project managers who already wear multiple hats. Managing freight carriers, coordinating with EPCs and resolving site-level issues often falls outside their scope or comfort zone. EXW can feel like a needless risk, especially when delivery failures can trigger delay damages or EPC change orders.
The result? Developers continue paying a flat $0.015/w freight rate, even when actual delivery costs can be a fraction of that. And when things go wrong on site, including delays, missed appointments, damaged shipments and warranty claims, they still have to deal with the fallout. DDP simplifies the contract but not the outcome.
Bridging the execution gap
In the 200-MW project mentioned earlier, Solterra Solutions, a full-service PV supply chain firm based in Raleigh, North Carolina, managed logistics for a leading IPP under EXW terms. The result: freight costs of just $0.004/w — yielding over $2.2m in savings relative to standard DDP quotes.
Importantly, the module manufacturer was fully supportive of EXW. It kept them profit-neutral while greatly reducing their operational risk. This model did not burden the developer’s team while providing them with full transparency, control and seamless execution.
This model doesn’t require developers to build internal freight teams or increase their overhead costs. It relies on alignment based on skillset: developers focus on developing projects, manufacturers focus on producing PV modules and supply chain firms focus on managing logistics. The result is efficiency across the supply chain that lowers project costs.
Looking forward: EXW, a smarter model
As project costs continue to rise, developers face greater pressure to protect project profitability and improve project execution.
EXW with a capable supply chain partner offers a clear path forward. It replaces opaque, flat-rate pricing with site-specific delivery rates. It provides developers with greater visibility and accountability over costs and schedule without adding more work to their team plate.
Rethinking DDP isn’t just a matter of price. It shifts module logistics from a source of anxiety to a project performance lever.
Interesting: “In the 200-MW project mentioned earlier, Solterra Solutions, a full-service PV supply chain firm based in Raleigh, North Carolina, managed logistics for a leading IPP under EXW terms. The result: freight costs of just $0.004/w — yielding over $2.2m in savings relative to standard DDP quotes.”
This is how America competes with Chinese solar PV panels and cells. Remediating these collective “soft costs”/BOM costs of a project is how one gets smaller distributed projects for say commercial or small industrial sites online for at or less than $1watt installed. Right now it seems the UAE have built some 1GWp solar farms at right at $1watt, this needs to move to solar PV projects in the 1MWp or less arena. There’s plenty of guilt to go around in the many and various AHJs that also create inconsistent “soft costs” from Regional, State, County and even City levels of “soft cost” interlopers.
I am told there are tax implications to EXW that differ from those associated with DDP deliveries to site…
Excellent point! In this particular case, the factory and job site were located in the same state so EXW terms did not trigger a change in tax jurisdiction. To achieve the same results in this case study without triggering a tax event in a different state you would use Free Carrier (FCA) terms with title transferred at the destination. This structure essentially mirrors EXW, allowing the customer to manage the freight and realize the upside without the tax implications cause by the title transferring at the factory instead of the job site.