Solar Trade War

EU Commission investigation & Chinese panel import tariffs explained

Those in the solar industry are very familiar with the proposed ‘anti-dumping’ tariffs on Chinese solar panels but if you aren’t up-to-date on exactly what is going on then here is a quick breakdown from the last few months:
 
The background
Chinese solar panel production has quadrupled in the last few years and Chinese solar panels now represent 80% of the European market. And why has this happened? Like many Chinese products the panels are very low-cost in comparison to European panels. In fact they are low-cost enough to have forced a 60% competitive price drop on all panels since 2010! This has been great news for installers and customers but tough on European panel manufacturers, some of which have even had to supply at a loss in order to match the Chinese panel prices.
 
The investigation begins...
Towards the end of last year the EU initiative ProSun raised complaints with the EU Commission and accused the Chinese government of illegally subsidising its manufacturers. They proposed import duties of up to 120% on Chinese modules. The European Commission began its investigations.
 
Solar industry voices concerns
Following the initiation of an investigation those in the solar industry quickly became worried about the potential introduction of tariffs. The Alliance for Affordable Solar Energy (AFASE) wrote a campaign letter to the European Trade Commissioner Karel De Gucht with the support of 1,024 signatories from company representatives across the EU solar PV industry, highlighting their major concerns that the proposed anti-dumping tariffs could lead to price increases that would actually reduce demand and seriously harm the solar industry.
The letter said that the proposed duties could ‘severely hamper’ the EU solar industry ‘to the detriment of the entire EU solar PV value chain and without significant positive effect for the EU solar producers’.
 
Tariffs and negotiations
Despite the concerns raised by those in the industry Karel De Gucht confirmed in June that 11.8% duties would be imposed on Chinese solar imports into the EU until the 6th of August. If negotiations for a minimum price cannot be reached then the EU Commission states it will up the duties from 11% to 47% average.
Recent reports suggest that the EU Trade Commissioner has reduced his initial demands to a minimum price of 58 cents per watt. On the other hand Beijing has moved on it’s maximum of no more than 50 cents per watt but the latest offer is still rumored to be 5 cents below the Commission’s minimum.
 
Making history
The solar case is the EU’s largest ever trade case in terms of the value of goods, which are estimated to be worth over €20 billion. At the same time Beijing has decided to launch its own investigation into European wine and has even threatened a similar investigation into automobiles.
Many see the timing of this move as a retaliation to the solar investigation, particularly as the largest exporters of wine to China – France, Spain and Italy – have all supported the EU Commission’s proposed solar panel import tariffs, while Germany has made a clear stance against the decision.
 
What next?
EU officials informed the Chinese that the basic details of the settlement would have to be agreed no later than the 28th June due to the associated technical work involved. With the deadline already passed the negotiations are now apparently taking place ‘at the highest level’.
The solar industry is braced awaiting a decision.