Solar Incoterms Guide
FOB · CIF · CFR · EXW · DDP (2026)
Incoterms 2020 defines who pays for shipping, insurance, and clearance at every stage of international trade. This guide covers the 9 most-relevant Incoterms for B2B solar panel procurement, with real JUSTSOLAR examples for each.
Quick Reference: Who Pays What
| Code | Main Carriage | Insurance | Import Duty/VAT | Last Mile | Rating |
|---|---|---|---|---|---|
| EXW | Buyer | Buyer | Buyer | Buyer | Use carefully |
| FCA | Buyer | Buyer | Buyer | Buyer | Conditional |
| FOB | Buyer | Buyer | Buyer | Buyer | Recommended |
| CFR | Seller | Buyer | Buyer | Buyer | Conditional |
| CIF | Seller | Seller | Buyer | Buyer | Recommended |
| CPT | Seller | Buyer | Buyer | Buyer | Conditional |
| CIP | Seller | Seller | Buyer | Buyer | Conditional |
| DAP | Seller | Seller | Buyer | Seller→Door | Conditional |
| DDP | Seller | Seller | Seller | Seller | Use carefully |
"Last Mile" = transport from destination port to buyer's warehouse/site.
9 Incoterms Explained
EXWEx Works (seller's factory)
Buyer with own freight forwarder in China and experience in export clearance.
Use carefully▼
Ex Works (seller's factory)
Buyer with own freight forwarder in China and experience in export clearance.
- ✓Make goods available at factory
- •Loading onto truck
- •Inland transport to port
- •Export clearance
- •Main carriage (ocean/air)
- •Import clearance
- •Destination transport
- •All insurance
At seller's factory — buyer takes risk from the warehouse floor.
Container picked up at JUSTSOLAR factory gate in Xiamen. Buyer's forwarder handles everything from truck loading onward.
FOBFree On Board (named port of loading)
Buyers with reliable freight forwarder + international trade experience. Standard for bulk solar procurement.
Recommended▼
Free On Board (named port of loading)
Buyers with reliable freight forwarder + international trade experience. Standard for bulk solar procurement.
- ✓Inland to port
- ✓Export clearance
- ✓Loading onto vessel
- •Main carriage (ocean freight)
- •Insurance (if desired)
- •Import clearance
- •Destination charges
Once goods are loaded onto vessel at origin port.
JUSTSOLAR delivers modules to Shanghai port + loads on vessel. Buyer's forwarder books the ocean freight and handles destination.
FCAFree Carrier (named place)
Air freight solar samples or container consolidation at designated terminal.
Conditional▼
Free Carrier (named place)
Air freight solar samples or container consolidation at designated terminal.
- ✓Delivery to agreed carrier at named place
- ✓Export clearance
- •Main carriage from named place
- •Insurance
- •Import clearance
- •Destination
At delivery to carrier nominated by buyer.
FCA Shanghai Airport for urgent sample shipment via air cargo.
CFRCost and Freight (named port of destination)
Buyer has own marine insurance policy and wants seller to handle freight booking.
Conditional▼
Cost and Freight (named port of destination)
Buyer has own marine insurance policy and wants seller to handle freight booking.
- ✓Inland to origin port
- ✓Export clearance
- ✓Loading
- ✓Main carriage (ocean freight)
- •Insurance (NOT covered)
- •Import clearance
- •Destination charges
- •Inland transport
Once goods are loaded onto vessel at origin port (same as FOB).
JUSTSOLAR ships CFR Santos — we book ocean freight to Santos; buyer arranges marine insurance + Brazilian import clearance.
CIFCost, Insurance, Freight (named port of destination)
First-time solar importers wanting predictable total landed cost before import clearance.
Recommended▼
Cost, Insurance, Freight (named port of destination)
First-time solar importers wanting predictable total landed cost before import clearance.
- ✓Inland to origin port
- ✓Export clearance
- ✓Loading
- ✓Main carriage (ocean freight)
- ✓Marine insurance (minimum cover)
- •Import clearance
- •Destination charges
- •Inland transport
- •Additional insurance if needed
Once goods are loaded onto vessel at origin port (same as FOB).
JUSTSOLAR ships CIF Manzanillo — we handle freight + marine insurance through to Mexico port; buyer handles only import + local.
CPTCarriage Paid To (named place of destination)
Multimodal (rail + ocean) shipments; less common in solar.
Conditional▼
Carriage Paid To (named place of destination)
Multimodal (rail + ocean) shipments; less common in solar.
- ✓Main carriage to named destination
- ✓Export clearance
- •Insurance
- •Import clearance
- •Destination handling
- •Final-mile
At delivery to carrier at origin.
CPT Almaty for Kazakhstan overland routing via Trans-Siberian rail.
CIPCarriage and Insurance Paid To
Multimodal + insurance included; buyer wants door-to-door visibility.
Conditional▼
Carriage and Insurance Paid To
Multimodal + insurance included; buyer wants door-to-door visibility.
- ✓Main carriage + insurance to named destination
- ✓Export clearance
- •Import clearance
- •Destination handling
- •Final-mile
At delivery to carrier at origin.
CIP Warsaw for inland-rail delivery to Polish site.
DAPDelivered at Place (named destination)
Buyer wants seller to handle everything except local tax clearance.
Conditional▼
Delivered at Place (named destination)
Buyer wants seller to handle everything except local tax clearance.
- ✓All costs to destination (freight + insurance + import arrangement support)
- ✓EXCEPT import duty + VAT
- •Import clearance duty + VAT
- •Unloading at destination
At named destination, before unloading.
DAP Lagos warehouse — JUSTSOLAR delivers to warehouse door; buyer handles Nigerian import duty + VAT.
DDPDelivered Duty Paid
Buyer wants zero logistics complexity + knows final landed cost at point of order.
Use carefully▼
Delivered Duty Paid
Buyer wants zero logistics complexity + knows final landed cost at point of order.
- ✓EVERYTHING — main carriage + insurance + import clearance + duties + VAT + destination delivery
- •Receive at door
At named destination, goods delivered.
DDP Dubai showroom — JUSTSOLAR handles everything; customer pays one all-in price. Higher $/W but zero buyer logistics work.
Incoterms FAQ
What's the most common Incoterm for solar panel imports?▼
FOB and CIF are the two dominant Incoterms for solar B2B. FOB is preferred by experienced importers with their own freight forwarder — cheapest headline price. CIF is preferred by newer importers wanting predictable total landed cost before customs. For new markets, CIF reduces friction significantly.
Why avoid EXW and DDP?▼
EXW puts all risk on the buyer from the factory floor — including Chinese export clearance, which most foreign buyers can't handle. DDP puts extreme risk on the seller including local import clearance and duties — most sellers price DDP with a significant buffer making it uneconomic. Both are common traps. Use CIF or FOB instead for most cases.
Who pays for marine insurance under CIF?▼
Under CIF, the seller arranges minimum marine insurance (Institute Cargo Clauses C) through to the destination port. Coverage is typically 110% of CIF value. For high-value shipments or sensitive routes, buyers often arrange additional insurance on top — some buyers prefer CFR + their own comprehensive policy.
What happens if the container is lost at sea under FOB?▼
Under FOB, risk transfers at origin port loading. If the vessel sinks in the Pacific, the buyer's marine insurance (which buyer arranges under FOB) covers the loss. Buyer pays the seller regardless of loss — this is why FOB buyers must arrange robust cargo insurance.
Can I change Incoterms after booking?▼
Yes but expensive — changing terms mid-shipment typically triggers re-invoicing, re-documentation, and sometimes port delays. If you realized CIF would be better after booking FOB, talk to JUSTSOLAR + your forwarder quickly. Better: decide Incoterms before issuing the Purchase Order, based on your destination market + insurance strategy.
Choose Your Incoterm, Get a Quote
JUSTSOLAR quotes FOB, CIF, CFR, DAP, DDP to any port. Tell us your preferred Incoterm + destination — we structure the pricing accordingly.
WhatsApp Frank for QuoteAlso see: Shipping Guide · Tariffs by Country