Shyam Mehta, Greentech Media's Senior Solar Analyst:

  • While the margins are not as high as those seen in many previous U.S.-China antidumping cases (electrical blankets, steel grating), they are certainly much higher than Chinese manufacturers would have hoped for. Stacked onto the margins for countervailing duties, they amount to levels of 35 to 36 percent, which is significant.
  • Keep in mind that this is a preliminary decision. We expect Chinese manufacturers and CASE representatives to contest the findings in days ahead.
  • The margins were obviously driven in part by the DOC's choice of the "proxy economy" to estimate costs, as China is considered a "non-market economy".
  • At these margins, China-based manufacturers would certainly have to raise U.S. prices to turn a profit. It is not feasible for them to maintain prices at tariff-free levels and still be profitable. In the short-term, this is likely to lead to module price increases in the U.S. which would serve to dampen demand and installation growth. If the Chinese were to absorb the tariff, it would place their costs close to parity with many U.S.-based suppliers.
  • However, Chinese firms are hardly likely to stand still. Broadly speaking, they have two strategies: set up cell manufacturing outside China, or use the tolling services of Taiwan-based suppliers to turn wafers into cells there, and then assemble the modules in China. Both strategies would allow the Chinese to bypass import tariffs. We estimate that tolling cells to Taiwanese firms would increase Chinese costs by 6 to 12 percent, which is meaningful but manageable.
  • Given this, we do expect that the decision will result in at least incremental investment in domestic manufacturing by Chinese firms. However, there are other, lower-cost manufacturing locations that these firms could set up manufacturing in, such as Mexico and Taiwan, for example that would still allow them to price their modules below that of U.S.-based suppliers. Therefore, we see the impact of this decision on U.S. manufacturing as positive, but spurring limited investment in the future and likely only temporary relief for existing U.S.-based suppliers.  


Suntech (NYSE: STP):  "These duties do not reflect the reality of a highly-competitive global solar industry. Suntech has consistently maintained a positive gross margin as revenues are higher than our cost of production. We will work closely with the Department of Commerce prior to their final decision to demonstrate why these duties are not justified by fact," said Andrew Beebe, Suntech's Chief Commercial Officer. "As a global company with global supply chains and manufacturing facilities in three countries, including the United States, we are providing our U.S. customers with hundreds of megawatts of quality solar products that are not subject to these tariffs," continued Mr. Beebe. "Despite these harmful trade barriers, we hope that the U.S., China and all countries will engage in constructive dialogue to avert a deepening solar trade war. Suntech opposes trade barriers at any point in the global solar supply chain. All leading companies in the global solar industry want to see a trade war averted. We need more competition and innovation, not litigation," continued Mr. Beebe.

Yingli (NYSE: YGE)  “We felt validated after the Department of Commerce’s preliminary CVD decision in March, which determined that we are not being substantially subsidized as the petitioners claim. Today’s preliminary anti-dumping tariff recommendation was not unexpected given the historical tariff levels in these types of cases. We will continue to aggressively defend ourselves and remain optimistic that we will persevere in the final determination,” said Robert Petrina, Managing Director of Yingli Green Energy Americas, Inc., the Company’s operating subsidiary in the U.S. “The overwhelming majority of the U.S. solar industry supports access to affordable solar energy and fair market trade. We are grateful to the tens of thousands of U.S. solar installers, developers, manufacturers, and suppliers who stand behind us today.” “As we’ve stated before, tariffs are disruptive and destructive for the entire solar industry,” said Mr. Liangsheng Miao, Chairman and Chief Executive Officer of Yingli Green Energy. “We remain fully committed to serving the U.S. market irrespective of the outcome


“The verdict is in,” said Gordon Brinser, president of SolarWorld. “In addition to its preliminary finding that Chinese solar companies were on the receiving end of at least 10 WTO-illegal subsidies, Commerce has now confirmed that Chinese manufacturers are guilty of illegally dumping solar cells and panels in the U.S. market. We appreciate the Commerce staff’s hard work on this matter.”
Brinser further stated, ““Commerce today put importers and purchasers on notice about the consequences of importing illegally subsidized and dumped products from China. We understand U.S. Customs and other federal agencies are already aggressively enforcing the countervailing tariffs in order to prevent circumvention, and we expect they will be equally vigilant with the anti-dumping tariffs.”


Tom Hecht, president of SCHOTT Solar, which produces solar PV panels in Albuquerque, NM: “The solar industry has been awaiting today’s decision from the U.S. Department of Commerce – and for good reason.  U.S. project developers and investors need clarity and confidence to make critical supply decisions. Today’s decision brings clarity – but creates another issue for U.S. developers. As they look to keep projects on track over the next three to four months, many will be trying to close on sources for PV panels not subject to the new tariff structure,” said Tom Hecht, President of SCHOTT Solar, which manufactures Buy-American compliant, high quality PV modules in Albuquerque, N.M.  “SCHOTT has over 50 years’ experience in solar. With factory sites in the U.S., Europe and Asia, SCHOTT Solar has been preparing to supply modules to our customers without interruption, regardless of the government decision." Hecht also noted, “Longer term, the U.S. solar industry and government must focus on energy policies that will provide long-term certainty to the market and continue to encourage investment.  Now is the time to support the industry in its efforts to create energy security for our nation and create additional jobs in manufacturing and services.”


Rhone Resch, president and CEO of the Solar Energy Industries Association (SEIA): "The solar industry calls upon the U.S. and Chinese governments to immediately work together towards a mutually-satisfactory resolution of the growing trade conflict within the solar industry.  While trade remedy proceedings are basic principles of the rules-based global trading system, so too are collaboration and negotiations. Importantly, disputes within one segment of the industry affect the entire solar supply chain--and these broad implications must be recognized.  In addition, the U.S. solar manufacturing base goes well beyond solar cell and module production and includes billions of dollars of recent investments into the production of polysilicon, polymers, and solar manufacturing equipment, products which are largely destined for export.  If the U.S.-China solar trade disputes continue to escalate, it will jeopardize these U.S. investments. Given these broader implications, it is imperative that the U.S., China, and other players in the dynamic global marketplace work constructively to avert or resolve trade disputes that will ultimately hurt consumers and businesses throughout the solar value chain."


Canadian Solar CEO Shawn Qu: “Canadian Solar is disappointed by today’s decision from the DOC. Imposing an obligation to post large bonds on solar imports at this preliminary phase of the antidumping investigation is unwarranted and will inflict losses on the entire solar industry. Limiting trade in solar products will cause panel prices to increase, defeating America’s goal of driving down costs and hindering its move toward a clean energy future. Our first priority should be to support the health of the industry as a whole through the financing and installation of solar, which is the key driver to expanding jobs in the US solar market.”

Jigar Shah, the President of CASE, stated, “Today SolarWorld received one of its biggest subsidies yet – an average 31 percent tax on its competitors. What’s worse, it will ultimately come right out of the paychecks of American solar workers. Fortunately, these duties are much lower than the 250 percent tax that SolarWorld originally requested. This decision will increase solar electricity prices in the U.S. precisely at the moment solar power is becoming competitive with fossil fuel generated electricity.”

“At the same time, CASE recognizes that today’s decision is ‘preliminary.’ Between now and a final decision before the end of the year, there are many issues that will be addressed and whose resolution would lead to a significantly lower tariff. CASE will continue to fight SolarWorld’s anti-consumer and anti-jobs efforts to ensure a better result for America’s solar industry,” continued Shah.


According to Kevin Lapidus, Senior Vice President Legal and Government Affairs for SunEdison, “The U.S. solar industry has been growing, adding new solar electric systems, creating jobs and investing billions of dollars in the U.S. energy infrastructure. By increasing the price of modules and therefore the price of solar energy, these tariffs will undermine the success of the U.S. solar industry and reduce the ability of solar energy to compete with electricity generated from fossil fuel.”

Ken Button, co-founder and President of Verengo Solar, stated, “As the second largest residential solar company in the country, Verengo has helped thousands of middle class families save money during tough economic times by installing solar.  Because our customers are very price sensitive, today’s decision to increase costs for solar cells and panels will make it harder for American families to access solar.”   

Tore Torvund, CEO of REC Silicon, with 500 solar jobs in the United States, commented, “This decision is short-sighted in the extreme and a severe setback for President Obama’s clean energy program with its goal of expanding the use of solar and other renewables. Further, we are very concerned about the increased likelihood that China will retaliate with their own tariffs on polysilicon exports from U.S. producers such as REC Silicon. Triggering a solar trade war is not in the best interests of the U.S. solar industry or its customers.”


Tom Gutierrez, CEO of GT Advanced Technologies, with another 500 solar jobs in the United States, stated, “Today’s Department of Commerce decision subsidizes a German-owned company to the tune of an average 31% tax on its competitors and potentially harms U.S.-headquartered companies like GT Advanced Technologies, Dow Chemical, REC Silicon and MEMC. Ultimately, protectionism fosters dependence and high-cost business models, rather than the innovation and agile approaches required for companies to succeed in the global marketplace. Now is the time for the U.S. solar industry to move forward with the development of advanced technologies that create jobs and enhance our energy security—in spite of this new barrier. American solar manufacturing can compete without special protections.”

Jesse Pichel with Jeffries Group Inc., “Environmentalists and the unemployed should be equally disappointed with this decision because lower cost solar panels make solar more competitive with dirty fossil fuels. It should be clear by now that there are more U.S. jobs on the installation side of the solar business than on manufacturing. These cases have a chilling effect on business and it will linger for a long time. It’s unfortunate that SolarWorld has taken this scorched Earth approach and that they are distracting from the growth of U.S. jobs and affordable solar energy.”