The solar trade war -- and its long tail of unintended consequences -- is making its way to Europe.
Solar-panel manufacturers in Europe have just made a long-anticipated formal trade filing against their competitors in China, according to a report in the WSJ.
The complaint was filed with the European Commission, the European Union's lead trade body, and like Germany's SolarWorld complaint in the U.S., it accuses China's solar panel manufacturers like Suntech, Yingli, and Trina of dumping their products in the EU at prices below their cost. There is a long list of European (centrotherm, Q-Cells, Soltecture, Odersun, Inventux, Solar Millennium, solarhybrid, and Sovello) and American solar manufacturers that have declared some measure of insolvency due to the onslaught of low-cost Chinese solar panels.
SolarWorld has indicated that it has not yet filed a case in Brussels. Bloomberg reports that SolarWorld "is preparing to file an anti-dumping complaint with the European Commission against Chinese manufacturers," adding that "SolarWorld wouldn’t say when it may formally file the complaint." SolarWorld issued this statement: "We have always said that we will ask the European Union to take urgent action against unfair competition from Chinese solar manufacturers. We can confirm that SolarWorld is working together with leading European manufacturers to urge the European Commission to act. We will not reveal any specific dates; however, the European industry initiative will communicate its intentions in the coming days."
Details on the filing process and timing and whether this addresses cells or panels are not yet clear, and we will report on this as soon as we get the particulars.
CASE has this comment: "Today, Germany-based SolarWorld has once again demonstrated that it is willing to undermine the world’s solar industry in a desperate effort to avoid competition in the marketplace. The entire global solar industry -- manufacturers, suppliers, installers and consumers -- has benefited from the sharp decline in the price of solar cells, and our industry’s future success is predicated on our ability to continually improve the economics of solar electricity generation. SolarWorld desperately needs that trend to halt to remain competitive. Like a crazed agent provocateur, SolarWorld is fueling global solar industry infighting for its own selfish interest. On behalf of tens of thousands of U.S. solar workers, we are very disheartened by SolarWorld’s unnecessary and destructive actions and urge the EU to reject their petition."
Germany's SolarWorld launched a U.S. anti-dumping trade claim against China in solar PV modules through SolarWorld America in October of last year. As we've covered, trade claims and anti-dumping tariffs don't always have clear and intended consequences.
Suntech just issued a statement: "Suntech rejects SolarWorld´s allegations that it has received illegal subsidies and is dumping solar products in Europe and will cooperate fully with any investigation. As the market leader with a global presence and customers in 80 countries, Suntech will continue to demonstrate its adherence to fair international trade practices. As a NYSE-listed company, we are transparent with regards to our cost of production and cost of capital. Suntech's growth is due to its efficient manufacturing operations and long-term investments in R&D to create high-performance solar products. We hope that the European Commission will recognize that any protectionist measures would harm the entire European solar industry and that a misguided trade war would undermine years of progress," said Jerry Stokes, President of Suntech Europe.
"Protectionist measures would increase the cost of solar energy in Europe and delay the transition from fossil fuels to renewable energy. Tariffs would also destroy thousands of jobs in the European solar industry," added Mr. Stokes. The EU solar industry provides employment for around 300,000 people, and more than 80% are employed in upstream and downstream industries such as raw material suppliers, equipment manufacturing, system design, installation and project financing, and not in cell production.
"In addition, the global supply chain for solar panels is complex and interconnected. Most solar systems installed in Europe are made up of components and services from manufacturers around the world. Suntech, for instance, sources a significant portion of its manufacturing equipment and raw materials from Europe. In 2010 and 2011 we procured a total of approximately EUR600 million of equipment and materials from European suppliers. We are concerned that any tariff to support European cell and module manufacturers would damage all other parts of the value chain. Suntech, along with the vast majority of European and global companies in the solar industry stand together in our support for free trade and our determination to see a trade war averted," concluded Mr. Stokes.
In some cases, relatively innocent bystanders get bludgeoned by the blunt anti-tariff penalties. We've reported on two tiny American solar manufacturers whose businesses are in jeopardy because of retroactive tariffs on imported solar products.
Shyam Mehta and Carolyn Campbell's analysis shows that the U.S. anti-dumping and countervailing duty tariffs of 36 percent don't impact the pricing of modules enough to meet parity with the (fairly priced?) SolarWorld panels. In Mehta's words, "I have been skeptical from the outset that it will result in any real benefit for domestic module manufacturers."
The impact of anti-dumping rulings on American polysilicon firms, the makers of the feedstock upon which silicon solar panels are based, could strongly impact that U.S. industry.
China's Ministry of Commerce (MOFCOM) said that it would look into anti-dumping and anti-subsidy claims on U.S. imported polysilicon, according to Reuters. According to the report, "The ministry issued the decisions in two statements on its website, citing preliminary evidence from several companies -- GCL Poly-Energy Holdings, LDK Solar, and Daqo New Energy."
The U.S. polysilicon manufacturers most likely to be affected by the ruling would be Hemlock, MEMC, and OCI, as well as REC, which has its polysilicon factory capacity in the U.S. In 2010, the exports of these U.S. firms into China resulted in a positive solar trade balance for the U.S.