A senior executive at Chinese manufacturer and project developer ET Solar has said hopes remain high for a negotiated settlement to the ongoing trade dispute between the US and China despite the lack of progress on the issue during a recent meeting between the two countries’ presidents.

Patrick Guo, executive vice president of ET Solar, said two sets of solar import duties imposed by the US and the retaliatory duties applied by China to US and EU polysilicon imports had created tough trading conditions for Chinese manufacturers, and that he hoped the two countries would soon resolve the matter through negotiation.

Speaking to PV Tech at the Solar Power International expo in California in September, Guo said a deal on the issue had been on the table that month during a visit to the US by Chinese president Xi Jinping, but that failed to materialise.

In a subsequent conversation this week, Guo said parties from the two countries were still in negotiations over the issue. PV Tech understands there is some expectation that a negotiated settlement will be reached before the end of this year, with negotiations still ongoing.

Hopes remain for negotiated settlement to US-China solar trade disputes

ET Solar's Patrick Guo. Image: ET Solar.

Guo said the second round of the duties brought in by the US government last year had been particularly harmful to Chinese companies looking to sell their products in America. The duties were designed to close a loophole that enabled Chinese modules to avoid US duties by using cells manufactured in Taiwan.

“[In] the first round, there wasn’t too much impact because we could still purchase the cells from Taiwan or other countries, then we shipped the modules to the States. But last year, the second round was a very big hurt. So I think that two governments now are trying to reach a settlement,” Guo said.

He said the duties had made the first half of 2015 “very difficult for most Chinese manufacturers”. The second half had been a “little better” because of falling production costs.

“But it’s not a profitable business,” Guo added. “Most of the profit they contribute to the US government. It’s no good for the industry. If we can reach the settlement next year, it will be very helpful for Chinese manufacturers to increase the shipments to the US.”

Asked what such a settlement would look like, he drew parallels with the one in Europe, where Chinese manufacturers subjected to EU duties have been given the chance to sign up to a minimum import price and annual sales quota to avoid paying the full levy. Interestingly, ET Solar is one of four companies to have been removed from the European MIP earlier this year for apparently transgressing the rules of the arrangement.

Guo said he also hoped the two countries could resolve the silicon dumping issue as well as the cell/module one. “If we can settle both of them it will be good. The silicon made in Europe and the US cannot import into China – there’s a very high tax. So if we can reach agreement it’s helpful for us to bring down the cost,” he said.

ET Solar’s international plans

On ET Solar’s global strategy, Guo said the company was hoping to make a strong play from 2016 in the US residential and commercial segments, mindful of the fact that these two look the most likely to continue growing should the expected investment tax credit step-down go ahead as planned at the end of next year.

Utility-scale deployment in the US is expected to take the biggest hit post-2016 if no extension deal is agreed, so Guo said ET Solar was focusing on bringing two new products to market aimed specifically at commercial and residential segments – an AC module and a cell optimiser module.

“The AC module, this is typical for the residential market especially for the system below 3kW; it’s very high efficiency to save cost,” Guo explained. “Then the cell optimiser module is mainly for commercial projects. So the timing of launching this to market, we hope that next year we can use the new products to penetrate into the residential and commercial markets.”

Hopes remain for negotiated settlement to US-China solar trade disputes

ET Solar's AC module is aimed at residential installations. Image: ET Solar.

Aside from the US, Guo said Pakistan and the Philippines were among ET Solar’s target emerging markets. In Pakistan ET Solar already has two 11.5MW projects under development, with a further 15MW in the pipeline. Guo said he anticipated a possibly 600MW in Pakistan in the next year.

In Africa, Guo said ET Solar was looking at various prospects, including Nigeria and Egypt. But he said African solar markets were proving slow to take off, with a few notable exceptions such as South Africa: “It’s not an open market, mostly it’s linked with the government – and anything linked with government is taking time.”

Tags: et solar, china, us, trade, anti-dumping, pakistan, philippines