US Solar Tariff Review Hints at Halved Rate for Chinese Cells

U.S. tariffs on Chinese solar cells may be halved after a Department of Commerce review of duties, boosting margins of manufacturers and installers.

The review of 2012 import tariffs recommended that the countervailing and anti-dumping duties levied on most Chinese solar manufacturers be reduced from a combined 31 percent to around 18 percent, the department’s International Trade Administration said in its preliminary results released Jan. 2.

Manufacturers of solar panels, including JinkoSolar Holdings Co. and Canadian Solar Inc., and customers, such as installers SolarCity Inc. and Vivint Solar Inc., are likely to see “a substantial potential improvement to U.S. margins,” Philip Shen, analyst at Roth Capital Partners LLC in Newport Beach, California said today in a research note.

The U.S. and China are caught in a dispute over role of government in aiding renewable energy companies that originated with a case brought by SolarWorld AG, a German solar manufacturer with a factory in Oregon. SolarWorld asked the Commerce Department in 2012 to apply tariffs to solar cells imported from China.

After the tariffs kicked in, imports of panels with cells made in Taiwan boomed, and SolarWorld said a year ago that Chinese makers had shifted production to skirt the duties.

Biggest Impact

The final determination is not expected until early May or June, said Shayle Kann, analyst at GTM Research in Boston by e- mail. The biggest impact will be on new imports, with shipment cash deposit rates likely drop to about 15 percent, Kann said.

Chinese solar companies are required to set aside a cash deposit equal to the percentage of duties owed on products being imported to the U.S. that will be refunded if the final determination rate is lower.

A World Trade Organization body said last month U.S. duties on panels made in China violated trade rules, reversing an earlier finding, in response to China’s appeal of a WTO finding earlier this year.

The Obama administration said Dec. 17 that it will set duties on solar products from China and Taiwan that may exceed more than 200 percent combined. The Commerce Department also completed a plan to include in the tariffs any solar panels assembled in China, regardless of the origin of the cells.

The U.S. International Trade Commission must rule on this last step before the tariffs go into effect. A decision is due next month.

Copyright 2014 Bloomberg

Lead image: Under review via Shutterstock

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