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Asia Report: China's Solar Giants Unite to Confront Tariff Ruling

For those keeping score, there's one more alliance that's sprouted up in response to ongoing U.S.-China trade disputes.

The original is CASM (Coalition for American Solar Manufacturing), which filed the first complaint. Then came CASE (Coalition for Affordable Solar Energy), which included manufacturers, installers and others who saw the trade complaint as a threat to their business model and their goal of lower installed costs.

Now we have SEPA (Solar Energy Promotion Alliance), which consists of Chinese manufacturers Suntech, Trina, Yingli and Canadian Solar. This newest group, of course, shouldn’t be confused with SEPA (Solar Electric Power Association), which helps American utilities integrate solar energy.

The Chinese SEPA group’s stated goal is to work together to appeal the recent tariff rulings by the U.S. Department of Commerce. They’ll do this by objecting to the way the DOC did the math on the anti-dumping ruling. Since the U.S. considers China a non-market economy, the DOC decided to use manufacturing costs in Thailand as a proxy. The DOC is expected to announce its final determination this fall.

Meanwhile, China is bracing for a potential trade case coming out of Europe. According to Reuters, SolarWorld Vice President Milan Nitzsche said, "European companies are preparing themselves for a trade case, anti-subsidy and anti-dumping, against China and Chinese companies." That, said Suntech CEO Zhengrong Shi, "would have a lethal impact on China's solar industry."


IN THE NEWS

Bankruptcy Fears for China’s LDK: Chinese photovoltaics leader LDK Solar is headed for bankruptcy according to industry observers within China, due to its immense debt burden and a global downturn in the solar energy market.

China Ex-Im Bank Approves Loan for Pakistan Hydro Project: The Export-Import Bank of China has approved a loan worth $448 million for the construction of Pakistan's Neelum-Jhelum hydropower complex.

Bhutan’s First Hydro Construction Company: An application filed last week with Bhutan's Ministry of Economic Affairs should give the south Asian country its first hydropower construction company.

Indonesia Bets on Geothermal: Indonesia, the country with the world's largest number of active volcanoes, is betting that all the hot rocks will provide a clean and reliable geothermal energy source for the future.

Japan Banks Push to Buy Wind Firm: Six Japanese banks will extend a syndicated loan of about 20 billion yen to two companies to purchase Seajacks, a British company that builds wind power generators, according to industry sources.

Japan’s Renewable Goals: Northeastern Japan should take advantage of abundant renewable energy sources such as wind power and solar energy for its reconstruction after the devastating March 2011 earthquake-tsunami disaster, the government's annual environment white paper said Tuesday.

Stock Falls Following Expansion Delay: OCI led declines among South Korean solar-cell companies following the polysilicon maker’s announcement that it will delay expansion plans.


MORE ON U.S. CHINA DISPUTES

Another Volley in U.S.-China Dispute: China's Ministry of Commerce on Thursday said that after a months-long investigation it has ruled that the United States government broke World Trade Organization rules by supporting six renewable energy projects through unfair grants.

Could Taiwan Be Next Solar Manufacturing Hub?: Taiwan, officially known as the Republic of China, shares a turbulent recent history with the People’s Republic of China across the Taiwan Strait. But after decades of hostilities, the two nations are now deep collaborators in global high tech supply chains, including solar PV. With Chinese makers suddenly facing 31 percent tariffs on exports to the U.S., it’s natural they would readily turn to Taiwan.

China High Court to Hear AMSC Suit: American Superconductor, a U.S. maker of wind-turbine components, said China’s highest court agreed to hear an intellectual-property suit against Sinovel Wind Group Co. The case is seeking $200,000 in damages and is the smallest of four suits totaling $1.2 billion in damages AMSC is pursuing in China against its former largest customer for allegedly violating sales contracts and stealing its technology.


INDIA PERSPECTIVE

From Bridge to India

Like many others, the Indian solar manufacturing industry has been unable to adapt to low prices and mass-manufacturing and has seen its export orders dry up as it finds itself unable to compete with global suppliers, leave alone the allegedly subsidized Chinese manufacturers. India has waived off import duties on solar cells and modules to promote solar power generation. Indian solar manufacturers’ only hope of survival right now is the domestic market. They have been lobbying to get basic import duties implemented on imports from China. The government has been rejecting their demands till now, but the U.S. ruling is likely to give more voice to their arguments.

With the U.S. protectionism, the price of solar is expected to increase in the U.S., but in an already oversupplied international market, Chinese manufacturers will look to offload their inventory in other markets like India. Indian developers might benefit from the lower prices in the short term. Overall, like all other trade barriers, this will also create price anomalies across markets.

India also has the advantage of low cost manufacturing and an additional benefit of domestic content requirement for the National Solar Mission (NSM). Manufacturing in India as compared to China, will not only help companies avoid U.S. tariffs, it will also help them get a large share of the Indian market. This might push India as an alternate manufacturing destination. It will not be easy though. The government will need to give a clear and long term strategy on promoting solar manufacturing in India.


HAVE YOUR SAY

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IN CASE YOU MISSED IT

May 14-21, 2012 Asia Report: Solar Stocks Tumble After Solar Ruling
May 7-14, 2012 Asia Report: Solar Dumping Announcement Set for May 17
May 1-7, 2012 Asia Report: European Ruling Could Cut Into Palm Oil Exports
April 23-30, 2012 Asia Report: U.S., India Strike $125 Million Investment Deal
April 16-23, 2012 Asia Report: Japan Solar FiT Likely In Line With Industry Request
April 9-16, 2012 Asia Report: Are China’s Sinovel, Goldwind Seeking Vestas Takeover
April 2-9, 2012 Asia Report: 200-MW Solar Project Planned in Japan
March 26-April 2, 2012 Asia Report: India Slashes Wind Incentive
March 19-26, 2012 Asia Report: India’s Wind Potential 30 Times Greater Than Believed
March 5-12, 2012 Asia Report: After Quake, Japan Pushes for Asia Supergrid
Feb. 27-March 5, 2012 Asia Report: Decision on Trade Dispute Looming

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