Today we learned from Rhone Resch of SEIA that SolarWorld is filing a trade claim in the EU in addition to their claim in the U.S.
According to Milan Nitzschke, a spokesman from Solarworld, quoted in REW, SolarWorld AG is trying to get signatures from companies that make up at least 50 percent of manufacturing capacity in the European solar industry before bringing a formal complaint against Chinese producers to the European Union Commission.
Additionally, the group led by SolarWorld, CASM (the Coalition of American Solar Manufacturers), issued a statement that touched several points:
- CASM called on a group of Chinese solar cell and panel importers to explain how what CASM contends is an unprecedented surge of dumped and subsidized exports made according to weak environmental standards and shipped halfway around the world could possibly benefit U.S. consumers or the environment, as the importers claimed this week.
- CASM emphasized the right of U.S. manufacturers and their workers to use trade remedy laws to seek relief from such imports, as permitted by the World Trade Organization. "Trade law investigations are not 'protectionism,' and to say so is inflammatory and diversionary," said Tim Brightbill, a partner at Washington, D.C. law firm Wiley Rein and lead attorney on the case. "When a country engages in anticompetitive practices that harm our industries, we have every right, even a duty, to respond with appropriate action."
- According to CASM, the effects of China's harmful trade practices speak for themselves: there has been a 350-percent surge in Chinese exports to the United States from 2008 to 2010 and even greater escalation this year without any technological or cost advantage. Labor accounts for just 10 percent of production costs, and Chinese importers bear the additional costs of shipping. Yet, the surge has prompted a 40 percent to 50 percent collapse in prices in the past year, causing unprecedented harm to an innovative, world-class competitive U.S. green-technology industry. All the while, China exports the vast majority of its solar products and uses comparatively little in its own market.
- Raju Yenamandra, vice president for sales and business development for SolarWorld, said, "In recent months and years, however, Chinese manufacturers have mounted a wild grab for world-industry control by putting a wide array of illegal and unregistered subsidies into service, causing massive oversupply in the market and creating distortions to international competition." He added, "I have profound trouble understanding how anyone could make the case that China's trade violations are beneficial, economically or environmentally."
- CASM called out Jigar Shah, saying, "It is surprising that a executive of the Carbon War Room, an advocacy group dedicated to reducing carbon production, would lead the Chinese importers in championing their trans-world shipping of supposedly clean-energy products, especially considering China's abysmal environmental record on manufacturing, its low regard for labor and civil rights, and its general lack of transparency."
Resch said that Presidential candidates will yell about an aggressive stand with China while President Obama has to be more measured and consider the U.S.-China relationship. Resch also said that there was room on the trade case for the two countries to negotiate.
CASE, the organization opposing SolarWorld's efforts, has gone live with its website.
SolarWorld and its unnamed partners in CASM announced a trade action in an Oct. 19 claim that China was dumping solar panels on the U.S. market. SolarWorld is a German company with 500 megawatts of panel production in Hillsboro, Oregon. (Here's the perspective of Gordon Brinser, the President of SolarWorld Americas, on the issue.)
November 8 was the first day of hearings at the U.S. International Trade Commission for the anti-dumping claim. The scope of the petition includes panels and panels manufactured in the U.S. using cells from China. That would include, for example, panels made by Suntech in its Goodyear, Arizona factory -- modules assembled in the U.S. using Chinese cells would be subject to tariffs. SolarWorld recently expanded the scope of the petition to include third-country manufacturing that uses Chinese cells.
Countering the CASM argument is CASE, which launched its website on October 8. CASE is the Coalition for Affordable Solar Energy, comprised of Carbon War Room, MEMC, SolarCity, SolarFirst, Sungevity, Suntech America, SunRun, Trina Solar, Verengo, Yingli Americas, Recurrent Energy, et al.
MEMC, the sole vertically integrated U.S. crystalline-silicon solar manufacturer, is acting as the point company for CASE. Most of the CASE signees are installers, financiers, and Chinese manufacturers.
Note that the U.S solar industry employs more than 100,000 people, and as per a study co-authored by GTM Research and SEIA, the U.S. is a significant net exporter of solar products. For now at least.
Here are two yields of tariffs on Chinese solar panels, one hypothetical and one happening right now.
Sempra Generation is developing the massive 700-megawatt Mesquite Solar project, located near Phoenix, Arizona. China's Suntech is the panel supplier for the initial 200-megawatt (DC) phase of the build. America's Advanced Energy Industries (Nasdaq: AEIS) is the inverter supplier for that phase. A tariff on the Chinese panels could jeopardize the economics of the project and sour the deal between Sempra and the power purchaser, Pacific Gas & Electric (PG&E). The project could wither and fail to get built. In this scenario, no American inverters from AE would be bought, no American workers would build the plant, no solar panels from Suntech's Arizona plant would be built and low-cost renewable energy would not be produced at the site.
It's difficult to view that as a victory for the American solar industry, but it could play out differently. First Solar or SunPower panels might work in the same deployment absent the hypothetical tariff. Solar Frontier, Sharp, or MiaSolé might also benefit from the imposition of a tariff on Chinese panels. So, non-Chinese panel vendors might benefit but American project developers like MEMC's SunEdison or Sharp's Recurrent could be hurt by rising module prices.
Now forget hypothetical scenarios -- here's evidence of real blowback from SolarWorld's trade claim:
According to Reuters, China's photovoltaic plant project developer CECEP Solar Energy Technology, part of the state-owned China Energy Conservation and Environmental Protection Group, put a USD$500 million solar project on hold due to the CASM petition. "If the solar panel prices increase by say, 30 percent in the United States, following the move, then we would certainly drop the plan because there's no profit to be made," Cao Huabin, the general manager of CECEP Solar Energy, told a news conference in Beijing, according to Reuters.
The ITC is scheduled to make a preliminary determination on the Antidumping Duty (AD) and Countervailing Duty (CVD) on December 5. Final determination is not scheduled until mid-2012.
Kevin Lapidus, Senior VP and General Counsel at SunEdison, part of MEMC, claims that SolarWorld is working against U.S. public policy goals to grow renewable power. He notes that the solar market is one of the few growth areas of the U.S. economy, and that more than half the solar employment picture is in the installation and downstream portion of the value chain -- not in cell or module manufacturing. He said, "Price declines have brought us close to grid parity. The imposition of tariffs will be a setback to the U.S. solar industry."
What Adam Browning of Vote Solar said bears repeating: a solar trade fight is a "circular firing squad where everyone gets hurt." Browning is a policy and regulatory expert, and Vote Solar is a U.S. solar industry-supporting policy group.
Here is the case calendar:
And here's the first page of the International Trade Administration Fact Sheet on the Case.