In a way, it’s new: A U.S.-based company is among those charged with dumping solar products (instead of doing the charging). But India’s move toward imposing duties on First Solar and more than twenty other solar companies that sell products in the country is really just the latest dose of uncertainty added to the solar market.
Bloomberg News broke the story last week that India had reached a preliminary conclusion that “U.S., Chinese, Taiwan and Malaysian solar-equipment makers dumped products in local markets,” causing “material injury” to domestic manufacturers. First Solar, which is based in Arizona and manufactures solar modules in Ohio and Malaysia, denied any wrongdoing.
“We are disappointed with the preliminary findings made by the Designated Authority which are inconsistent with our own assessment of facts made as per WTO guidelines,” the company said in an emailed statement. “We disagree that we have dumped imports into the Indian market. We are assessing our options and will pursue legal measures as necessary.”
The solar market has been beset by accusations of trade misdeeds since a collection of U.S. manufacturers -- led by SolarWorld, a German company with a big plant in Oregon -- pointed a finger at China in October 2011 and subsequently won duties through the U.S. International Trade Commission.
The Europe Union followed suit with its own accusations and sanctions, but later reached a deal with the Chinese that set minimum prices and volume limits. Meanwhile, China answered the U.S. penalties with duties on U.S. exports to China of polysilicon, the key component in the most common photovoltaic cells. And just this February, the U.S. trade bodies started pursuing allegations that Chinese companies are finding their way around duties by using solar cells made in Taiwan.
While India’s preliminary dumping determination is new, the charges aren’t; this is a probe that began in 2012. That was a very different time for the solar industry, when solar capacity dwarfed demand.
But the trade disputes linger, and while none so far have had a profound impact on solar’s growth, the Indian solar consultancy Bridge to India argued that the imposition of duties would certainly hurt solar’s growth in India -- where solar capacity nearly doubled last year to just over 2 gigawatts. It said even the anti-dumping investigation process is harmful for “the insecurity it brings to a market that instead needs nurturing.”
This is a constant tension in all of the disputes: nearly every nation wants to install more solar power, but domestic manufacturers seek to protect or expand their business amid fierce competition, while project developers chase the cheapest products that meet their quality standards.
Ironically, India’s desire to boost domestic manufacturing had, early on, played a role in building First Solar’s presence in the country: India’s domestic content requirement -- which, by the way, the U.S. is now fighting in the World Trade Organization -- initially didn’t cover thin-film solar panels, First Solar’s specialty. So as manufacturers of silicon panels faced barriers to entry, First Solar grabbed market share.
India has since expanded those requirements to cover thin film, but First Solar’s growth in other areas of the world has made India a less crucial, though not insignificant, market for the company. Meanwhile, India is chasing bold targets of 10 gigawatts of solar by 2017 and 20 gigawatts by 2022.