By Bridget McCrea
In Deciphering the solar dumping conundrum, tED Magazine reported on how Chinese solar panel makers had been unceremoniously dumping (or selling their products for lower than fair market value) their products into the U.S. market since late-2011.
In May 2012, the Obama administration ordered tariffs of 31% and higher on those solar panels imported from China. More than 60 Chinese firms, including the world’s largest solar panel maker, Suntech Power Holdings Co., face the 31% duty on their exports to the U.S., retroactive to shipments made in February. According to the U.S. Department of Commerce (DOC), all other Chinese exporters of solar cells will pay a tariff of 250%.
Then, in October, the DOC announced its final decision on tariffs to be imposed on solar products imported from China, setting anti-dumping duties of 31.73% on imports of solar photovoltaic cells and panels from Suntech, 18.32% from Trina Solar, 25.96% from other companies that had requested but not received individual duty determinations, and 249.96% from all other Chinese producers, including those controlled by the Chinese government.
The E.U. Steps into the Debate
The solar dumping issue resurfaced in May, when several media outlets reported that the U.S. and Europe were preparing to settle the Chinese solar panel cases. The New York Times,for example, said that the Obama administration and the European Union have each decided to negotiate settlements with China in the world’s largest antidumping and anti-subsidy trade cases involving China’s roughly $30 billion a year in solar panel shipments to the West.
According The New York Times, the plan would be to carve up the global solar panel market into a series of regional markets (via a model that’s being called “managed trade of solar panels”). This move would increase the price of China’s solar panel exports because their manufacturers would have to charge more while limiting the total number of solar panels they could ship. In exchange, the steep tariffs levied against the Chinese manufacturers would be minimized or repealed.
In China May Escape E.U. Solar Tariffs, Forbes says that a majority of the 27 governments in the E.U. oppose a plan to charge new import taxes on solar panel imports from China, undermining efforts by Germany’s solar panel industry to pressure Brussels to charge China with dumping cheaper solar products into the European market. The duties, averaging 47%, will be rolled out in June for a trial period and could be withdrawn if both sides can reach a negotiated settlement on new prices for the Chinese-manufactured products.
Working Toward Resolution
As managing editor at Ft. Lauderdale-based SolarWakeup.com and a solar industry consultant, Yann Brandt says he’s seen a slight uptick in solar cell pricing in recent months due to the U.S.-imposed tariffs. The increases have been minimal, however, due to the fact that Chinese manufacturers can circumvent the levied fees by simply having their products shipped from countries like Taiwan. “We see a lot of that happening,” says Brandt.
On the E.U. side of the issue, Brandt says the union as a whole can recommend tariffs but the final say on any such fees comes down to the individual countries that make up the E.U. “Both Britain and Germany have come out against any tariffs,” says Brandt.
Brandt points to the managed trade of solar panels as one viable way to combat the dumping without imposing tariffs. The CATO Institute in Washington, D.C., says that the model would work like this: rather than agreeing to lower their own barriers to trade, the U.S. and E.U. would convince China to acquiesce to those barriers by altering their form. The new model would keep prices high and limit foreign competition, but unlike tariffs, a mandated minimum price would enable the foreign manufacturers to benefit from those high prices.
Impact on Distribution?
Even with the current market in turmoil due to the continued dumping and subsequent tariffs, Brandt sees opportunities in the solar market for electrical distributors. He says that so far, no major projects have been put on hold or cancelled due to the U.S.-imposed tariffs. In fact, he says the distribution opportunities have expanded over the last seven years.
“Back in 2006, when I got into the industry, distributors weren’t really selling solar unless it was on a very large scale,” says Brandt. “With the resurgence of the residential [building] market, I think distributors will continue to do pretty well in this arena.”
According to The New York Times, the U.S. is already collecting tariffs totaling about 30 percent while the European Union is expected to impose similar tariffs of about 50 percent on June 5, and may backdate them to March 5.
McCrea is a Florida-based writer who covers business, industrial, and educational topics for a variety of magazines and journals. You can reach her at email@example.com or visit her website at www.expertghostwriter.net.Tagged with tED