Chinese look at options as solar war of words gets louder

May 21, 2012
US solar panel made in China

It came to nobody’s surprise when the Chinese government slammed a US anti-dumping ruling against Chinese solar power equipment as “unfair” and “unreasonable” amid warnings of a trade war that would end up only harming efforts to promote clean energy.

The ruling, which came down on Thursday in the US, imposes heavy tariffs on Chinese solar companies ranging from about 31 percent to 250 percent on charges of dumping.

Shen Danyang, spokesman for China’s Ministry of Commerce (MoC), has condemned the US anti-dumping tariffs as trade protectionism. "By deliberately provoking trade friction in the clean energy sector, the United States is sending the world a negative signal about trade protectionism," he said in a statement.

The two governments have pledged to cooperate in developing renewable energy but have accused each other of violating free-trade pledges by subsidizing their own manufacturers.

The Chinese Renewable Energy Industries Association said that China is requesting the US Department of Commerce to "recheck the facts and make the right decision" without being affected by the US election.

 Shen said the US has refused to listen to the defense and evidence presented by Chinese manufacturers when computing and assessing the dumping margins, despite the manufacturers' active cooperation.

Instead, the US decided to use solar panel production costs in Thailand, a country with a poorly developed solar industry, as a proxy for costs in China, which Shen believes artificially lifted the dumping margins.

"The practice is unobjective and unjustified," he said, urging the US Commerce Department to "right the wrongs" in upcoming probes and avoid unfair rulings.

The US decision to impose import duties on Chinese solar panels will raise their price to USD1.11 per watt, according to calculations by Bloomberg New Energy Finance. That price is 17 percent higher than the current spot price of non-Chinese panels, said the research.

"Chinese companies will lose their price advantage compared with US companies with the high import taxes," said Gao Hongling, deputy secretary-general of the China Photovoltaic Industry Alliance.

On to Europe

The main antagonist against the Chinese was the US subsidiary of German solar company SolarWorld which, fresh off what seems to be a victory, has already started making moves for a similar action against the Chinese in Europe.

The US decision “is a first step so that we can return to fair competition based on technology,” Chief Executive Officer Frank Asbeck told Bloomberg by phone. “It’s a signal for Europe, where we plan to file a similar complaint at mid-year.”

The European Union is already considering whether to launch an anti-dumping and anti-subsidy investigation into imports of Chinese photovoltaic solar panels.

"If Europe proposes an investigation, Chinese companies will suffer a lot," Gao said.

China exports more than 90 percent of its photovoltaic solar cells to the US and European markets.

Other industry players in the US, however, disagree with SolarWorld’s allegation and say the decision will backfire.

Other cheap sources

"It is our feeling that given the current climate in the United States, blocking Chinese companies from the US will simply shift imports from other places" such as Malaysia and India, said Jigar Shah, president of the Coalition for Affordable Solar Energy, a group of US and Chinese firms that promotes free trade and opposes trade protectionism in the solar power industry.

Chinese solar equipment manufacturers warned earlier that sanctions could result in a loss of American jobs because US companies are both buyers of Chinese products and suppliers of materials. They said Chinese manufacturers spend some USD2 billion a year to buy materials such as polysilicon from US suppliers.