The World's #1 Renewable Energy Network for News, Information, and Companies.

31 Percent Anti-Dumping Tariffs Announced for Chinese Solar Panels

The U.S. Department of Commerce on Thursday announced stiff anti-dumping tariffs of around 31 percent on crystalline silicon solar panels imported from China, leading to a new round of concerns on how the duties will impact the growing American solar industry.

In its preliminary determination, the DOC set duties at 31.14 percent for Trina, 31.22 percent for Suntech and 31.18 percent for other Chinese solar manufacturers that chose to participate in the investigation. The companies that chose not to participate were hit with a 250 percent tariff. The tariffs will be retroactive and be applied to panels that were shipped from as far back as about the middle of February 2012.

A final determination must still be made, and the tariff rates can still be adjusted upward or downward. But the ruling gave an anxious industry a better sense of the implications of the trade case. And the numbers that came out were much higher than many expected.

Thursday's announcement was for anti-dumping tariffs and it was the second of two duties set by the DOC that directly stemmed from a trade complaint filed by SolarWorld’s American subsidiary. DOC officials will now confirm the information provided by the Chinese government and the Chinese manufacturers that chose to participate. Final determinations are expected to be made for both tariffs in late July, though an annoucement may not come until September.

In March, the Department of Commerce announced a preliminary determination that set relatively modest countervailing duties that essentially measure the level of subsidies and benefits coming from the Chinese government to Chinese crystalline silicon panel manufacturers. The countervailing duties were applied on three levels: 4.73 percent applied to Trina, 2.9 percent to Suntech, and 3.59 percent to all others. That had been a welcome relief for many in the solar industry, especially the installers who have come to base their business models around low-cost panels. But the feeling was short-lived with the announcement of the countervailing tariffs, which will be added to the anti-dumping tariffs announced on Thursday.

The two together are certain to make Chinese solar panels much more expensive. The ruling could add about $0.30 a watt to the price of a panel. Chinese companies are expected to set up workarounds like tolling in which they send panels through another country, or even set up remote manufacturing facilities outside their country. Tolling is expected to add about $0.06 to $0.08 per watt.

The Background

In a trade complaint filed in October, SolarWorld's American subsidiary and six other solar panel manufacturers claimed that Chinese companies are receiving an unfair level of subsidies from the Chinese government and that they are then dumping their products at below the cost of production into the American market. This, they contend, is stifling solar panel manufacturing in the United States. The case made by the Coalition for American Solar Manufacturing (CASM) has been folded into the growing political narrative that America must reclaim its ability to lead in the global arena of manufacturing and innovation.

On the other side, the Coalition for Affordable Solar Energy (CASE) says that the overriding goal is to make solar energy as competitive as possible. Low-cost Chinese panels have figured prominently in this race to make solar energy competitive with fossil fuels. Panel prices have dropped by 50 percent in just the past year, and that growth has spurred an installation boom that many in the industry feel is unsustainable if prices spike.

Industry Reaction

  • Jigar Shah, President of CASE: “Today SolarWorld received one of its biggest subsidies yet – an average 31% tax on its competitors. What’s worse, it will ultimately come right out of the paychecks of American solar workers. Fortunately, these duties are much lower than the 250% tax that SolarWorld originally requested. This decision will increase solar electricity prices in the U.S. precisely at the moment solar power is becoming competitive with fossil fuel generated electricity. At the same time, CASE recognizes that today’s decision is ‘preliminary.’ Between now and a final decision before the end of the year, there are many issues that will be addressed and whose resolution would lead to a significantly lower tariff. CASE will continue to fight SolarWorld’s anti-consumer and anti-jobs efforts to ensure a better result for America’s solar industry.”
  • Rhone Resch, President and CEO of the Solar Energy Industries Association: "The solar industry calls upon the U.S. and Chinese governments to immediately work together towards a mutually-satisfactory resolution of the growing trade conflict within the solar industry.  While trade remedy proceedings are basic principles of the rules-based global trading system, so too are collaboration and negotiations. Importantly, disputes within one segment of the industry affect the entire solar supply chain — and these broad implications must be recognized. In addition, the U.S. solar manufacturing base goes well beyond solar cell and module production and includes billions of dollars of recent investments into the production of polysilicon, polymers, and solar manufacturing equipment, products which are largely destined for export.  If the U.S.-China solar trade disputes continue to escalate, it will jeopardize these U.S. investments."
  • Gordon Brinser, President of SolarWorld: "Today, SolarWorld and the many industry players who embrace the sustainable efficiency gains and price declines that come from fair competition can take heart that the U.S. government is standing up against Big China Solar,” said Gordon Brinser, president of SolarWorld Industries America Inc. and leader of the Coalition for Solar Manufacturing (CASM). “Commerce’s careful measures could help thwart China’s illegal drive to control the solar market and supplant manufacturers and jobs in America, the very country that invented, pioneered and innovated solar to today’s mainstream viability.”
  • Steve Ostrenga, CEO Helios Solar Works: "Commerce’s ruling in the SolarWorld case is a bellwether decision. It underscores the importance of domestic manufacturing to the U.S. economy and will help determine whether the country will be a global competitor in clean technologies or outsource them China. It is also critically important for thousands of U.S. workers.”
  • Andrew Beebe, COO of Suntech: “These duties do not reflect the reality of a highly-competitive global solar industry. Suntech has consistently maintained a positive gross margin as revenues are higher than our cost of production. We will work closely with the Department of Commerce prior to their final decision to demonstrate why these duties are not justified by fact."
  • Sen. Sherrod Brown, D-Ohio: "The Commerce Department’s decision today shows that trade enforcement matters, and is an important step towards combating China’s multiple, massive, and illegal trade violations. It’s been proven that China isn’t competing in the clean-energy marketplace — it’s cheating, and its unfair solar trade practices have already resulted in the announced the loss of thousands of good-paying U.S. manufacturing jobs. I applaud the Commerce Department for working to hold China accountable for its unfair solar subsidies and dumping practices. If we want to have a solar manufacturing industry, we need to utilize trade enforcement tools to combat the massive export subsidies other countries provide. This decision will help establish a fair and level playing field for American manufacturers, including the many solar manufacturers in Northwest Ohio.”

The Fallout

Many in the industry have been fretting that a steep penalty on Chinese panels would stifle the rate at which solar has been growing in the American market. New tariffs, they say, have the potential to derail the downward costs that have made solar a more appealing option to investors. As a result, the industry could see significantly less growth in the years ahead. And that means fewer American jobs.

Melanie Hart and Kate Gordon of the Center for American Progress refuted that notion this week, arguing instead that not challenging legal practices sets up a scenario in which China’s leaders will dictate not only the price of solar panels that dominate the open market, but they will also choose which types of solar technologies their government will support. This, they say, could lead to stunted growth in both installations and innovation.

“[O]nce Chinese companies drive out their competition from the solar manufacturing sector, they will immediately start raising prices to increase their profits and start to wean off of government subsidies,” they wrote this week. “We are currently seeing a similar pricing pattern in the global rare earths market. China has around one-third of the world’s rare earth supplies but controls 90 percent of the global market, primarily because lax regulatory oversight enabled Chinese companies to mine cheaply and price everyone else out of the market.”

In an op-ed penned for the Boston Globe, Tom Gutierrez, CEO for New Hampshire-based GT Technologies, wrote that the trade dispute has done little to help build a stronger American solar market. All it has done, he said, is force Chinese manufacturers to find new ways to enter the U.S. with their low-cost panels.

“Many Chinese manufacturers are simply redirecting their flow of products through other countries to avoid the US-imposed barriers, or in some cases the location of their production, and in all likelihood they will continue to provide the global market with competitively-priced solar panels,” he wrote. “This action by the U.S. government merely forced Chinese companies to find new ways to innovate in order to compete. In all likelihood the Chinese will be just fine. In fact, we may be transforming domestic Chinese players into more formidable forces by encouraging their global diversification and expansion. But what about the U.S. solar industry?”

The debate has extended far beyond the solar industry and has become a political lightning rod that has shaped some unexpected alliances. For an industry that depends on liberal-leaning policy support, the free market principles touted by the Coalition for Affordable Solar Energy have generally played strongest in conservative circles. Democrats, meanwhile, are pushing a “get-tough-on-China” strategy that threatens to undermine the low-cost goals of much of the industry. Just this week, two Democrats — Sens. Sherrod Brown of Ohio and Charles Schumer of New York — introduced a bill aimed at China that would exclude all foreign-made solar panels from a 30-percent tax credit unless the modules passed a threshold of domestic manufacturing.

RELATED ARTICLES

Renewable Energy Finance

Clean Energy ETFs Are on a Tear

Eric Balchunas, Bloomberg Green investing used to be synonymous with losing money. But while the S&P 500 Index is up 2 percent this year, and the MSCI All-Country World Index is up 5 percent, clean energy ETFs have double-digit re...

Wheels, Towers and Trees: Unconventional Renewable Energy Technologies in the Pipeline

Andrew Williams, International Correspondent A number of companies around the world are developing novel technologies in an effort to grab a slice of the global renewable energy market.  Although many of these technologies are simple incremental improvements to e...
UK Parliament Clean Energy Leaders

UK Government Names Clean Energy Cabinet Members

David Appleyard, Contributing Editor With the UK general election now over and a majority Conservative Party government in place, the re-elected Prime Minister David Cameron has now named key members of the government charged with steering the UK’s clean energ...
Microgrids

Coast to Coast and Across the Electric System, Microgrids Provide Benefits to All

Dick Munson, Environmental Defense Fund At the most obvious level, microgrids could disrupt today’s utilities and their regulated-monopoly business model, because they challenge the centralized paradigm. In a nutshell, microgrids are localized power grids that ha...

CURRENT MAGAZINE ISSUE

03/01/2015
Volume 18, Issue 3
file

STAY CONNECTED

To register for our free
e-Newsletters, subscribe today:

SOCIAL ACTIVITY

Tweet the Editors! @megcichon @jennrunyon

FEATURED PARTNERS



EVENTS

EU PVSEC 2015 (European PV Solar Energy Conference and Exhibition)

The EU PVSEC is the largest international Conference for Photovoltaic re...

CA Wine Industry's 2015 Solar Update- WEBINAR

Proceeds from event registration will go to the CA Sustainable Win...

Energy Security: Opportunity Power with the Sunny Boy Secure Power ...

Wouldn’t it be great to have a grid-tied inverter that could still...

COMPANY BLOGS

EU PVSEC 2014 extends its Scope

Added focus on application and policy topicsAbstracts for conference con...

EU PVSEC 2014: Call for Papers Receives Great Response

More than 1,500 contributions apply for presentation in AmsterdamScienti...

Boulder County Residents Generate Their Own Energy with Community S...

Despite a soggy afternoon, solar energy advocates gathered at ...

NEWSLETTERS

Renewable Energy: Subscribe Now

Solar Energy: Subscribe Now

Wind Energy: Subscribe Now

Geothermal Energy: Subscribe Now

Bioenergy: Subscribe Now  

 

FEATURED PARTNERS