The trade row between the US and China over renewable energy trade policies could soon see additional players join the mix, with recent reports suggesting that India might launch its own anti-dumping probe into Chinese solar imports later this month. Meanwhile, Solarworld AG - one of Germany’s largest solar products manufacturers - is now planning to launch a case in Europe against Chinese competitors, according to the company’s top official.
The US-China disagreement over the use of renewable energy support has also pitted solar companies within the US against one another. Last month, a coalition that claims to represent 97 percent of the US solar industry asked solar panel maker SolarWorld Industries America Inc. to withdraw its petition calling for punitive duties on China for unfair subsidies.
Entire industry at risk: US solar energy coalition
The Coalition for Affordable Solar Energy (CASE), which counts 145 companies as members and was founded in November in response to the SolarWorld petition, sent a letter last month to SolarWorld America President Gordon Brinser in which it argued that the tariffs the company is pursuing against Beijing could “fundamentally undermine many years of effort by all of us who care about the future of solar power.”
CASE particularly decried the short-sightedness of the petition, which - they argue - only considers the needs of solar panel manufacturers. Instead, the coalition asserts that the majority of the existing jobs in the US solar industry are in sales, marketing, design, installation, and maintenance - all of which have benefitted from the lower costs of solar panels.
In a statement announcing CASE’s formation in November, Jigar Shan, co-founder and Chairman of CASE, similarly stressed that “placing protectionist barriers against more efficient and affordable solar cells - whatever their origin - discourages innovation and investment.”
Brinser was quick to rebuff such complaints, however, claiming that Case President Jigar Shah was just speaking on behalf of Chinese manufacturers.
CASE is attempting to persuade the Obama administration that a negotiated settlement with China would be the most effective means of solving the dispute, according to Reuters.
The SolarWorld America petition - which was filed in October along with six other US solar energy companies that requested anonymity - claims that Chinese solar panels have been illegally subsidised by the Chinese government and sold to the US at trade-distorting prices. The complaint further alleges that Beijing uses cash grants, raw materials discounts, preferential loans, tax incentives, and currency manipulation to boost its exports of solar panels.
The US Commerce Department is expected to make a preliminary decision by 13 February 2012 on whether to impose tariffs on imports of Chinese solar panels, after the US International Trade Commission voted unanimously on 2 December to allow the case to proceed (see Bridges Trade BioRes, 19 December 2011).
Meanwhile, China’s Ministry of Commerce is conducting its own probe into Washington’s renewable energy support, specifically with regards to wind energy, solar, and hydro technology products (see Bridges Trade BioRes, 5 December 2011). Depending on the findings of the investigation - which are expected in May - the agency could introduce duties as early as this year.
Solar industry’s troubles not limited to the US
Driving the petition is Solarworld AG, SolarWorld Industries’ German parent company, which reported larger than expected losses in 2011 and has seen its stock price steadily decline over the past three years.
Solarworld AG Chief Executive Officer Frank Asbeck confirmed on 8 January that the company hopes to partner with other European firms in launching their own anti-dumping proceedings at the European Commission’s competition agency, according to Bloomberg.
The economic downturn in the US and Europe, coupled with subsidy cuts imposed by government austerity measures, has hurt the demand for solar energy products. The market has also experienced a considerable surplus since 2010, when China’s two largest manufacturers of solar panels, Suntech Power Holdings Co and LDK Solar Co, doubled production.
The price of solar panels has dropped 40 percent between 2006 and 2011, which has partly been blamed to the high-profile collapse of three US-based solar companies, particularly Solyndra LLC.
Indian manufacturers could join the action
The spat between US and Chinese manufacturers of solar panels could also grow to involve India, with Indian manufacturers complaining about both Chinese and American exporters.
The Indian government is reportedly considering the launch of its own anti-dumping probe into Chinese solar panels; authorities in New Delhi have also been asked by some domestic manufacturers to levy a 15 percent tariff on imports of thin-film panels. Such a tariff, if implemented, would primarily affect US-based manufacturer First Solar Inc.
Currently American and Chinese solar panels can be imported into India tax-free under exemptions for thin-film products in the Indian government’s Solar Mission programme, which usually requires that developers utilise local equipment. Meanwhile, domestic Indian manufacturers must pay duties on raw materials. Furthermore, Indian projects, if they import American or Chinese equipment, are often eligible for cheap credit provided by US and Chinese state-backed lenders, thus lowering the overall cost of borrowing.
“I’m feeling a bit of anguish because we want solar to succeed but we need fair competition,” K. Subramanya, chief executive officer of Tata BP Solar, India’s third-largest cell and panel maker, said.
ICTSD Reporting; “Chinese companies prefer dying to being bought, JinkoSolar says,” BLOOMBERG, 6 January 2012; “India may join US-China trade spat to prevent solar ‘disaster’,” BLOOMBERG BUSINESSWEEK, 24 December 2011; “Solarworld planning China anti-dumping case in Europe, CEO says,” BLOOMBERG, 9 January 2012; “US-China solar trade dispute may see India joining with probe,” BLOOMBERG, 20 December 2011; “US solar companies urge SolarWorld drop China case,” REUTERS, 20 December 2011.
