Top executives from 14 leading Chinese PV manufacturers gather to fight SolarWorld

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Growing indignation on the part of leading Chinese PV manufacturers in relation to the ongoing trade dispute has spurred senior executives of 14 leading producers to gather and set out a coordinated plan of defence. The plan is in response to the prospect of duties being imposed on solar PV products entering the US, due to claims of price dumping that are currently under investigation by the ITC.

Organised by the China Chamber of Commerce for Import and Export of Machinery and Electronic Products (CCCME), but believed to have been led by Yingli Green’s sending of press invitations on behalf of the group, companies vowed to fight the allegations, targeting the original petitioner, SolarWorld, to withdraw the claims.

The unprecedented move saw a group of 14 – normally fiercely competitive – leading producers demonstrate a unified front, a scenario that has never been seen before, under the banner of ‘China-based Solar Industries in Response to Anti-dumping and Countervailing Investigations in the US.’

The seriousness placed on the potential duties was not lost on the Chinese producers as key industry executives were speakers at the event. These included: Guiqing Wang, vice president of the CCCME; Liansheng Miao, chairman of the board and CEO of Yingli Green Energy; Dr. Zhengrong Shi, chairman and CEO of Suntech; Jifan Gao, chairman and CEO of Trina Solar and Shawn Qu, chairman, president & CEO of Canadian Solar.

However, the meeting, which included a press conference and a detailed and lengthy statement, made clear the group’s desire not to be positioned as a catalyst for a China versus US trade war. It appeared the meeting’s aim was to separate the group from a Chinese PV industry trade group that has been pushing for counter-investigations in relation to subsidies paid by the US government and individual States themselves to US-based companies, notably polysilicon producers, which include Hemlock Semiconductor and MEMC.

The group of Chinese PV manufacturers preferred to target SolarWorld and the yet-to-be-identified other six petitioners. Emphasis was placed on SolarWorld and others having made strategic mistakes, highlighting that they do not appear to have kept up with competition.

A press statement from the group noted that, “Even if some European and US PV companies, such as SolarWorld, are underperforming in some respects, such underperformance has nothing to do with the exports of Chinese PV companies, but instead is because of their misjudgement of the growth opportunities in the market. From 2009 to 2011, the global PV production capacity grew significantly and beyond the demand of the global market.

“Due to reduced incentives, improper investment decisions and lack of scale, certain PV companies have found themselves in a disadvantageous position in the market competition. It is a normal phenomenon in market competitions. These frustrated companies should revisit and adjust their own business strategies, elevate their production and management levels, and meet consumer’s demand in a better way. They should not raise ill-founded AD/CVD investigations in the hope of creating obstacles to the normal operation of Chinese PV companies.”

Speculation and frustration has continued over the identity of the unidentified petitioners. The Chinese companies have, in their retort, also placed emphasis on the fact that the petitioners represented only a fraction of the US PV industry, suggesting that their claim in relation to jobs was an attempt to undermine the perceived legitimacy of the claims.

Soon after the SolarWorld complaint was made public, PV-Tech was told that First Solar was one of the six unidentified petitioners – a claim that has since been publicly denied by First Solar.

As it turns out, this comes as no surprise. As the lowest-cost producer of PV modules with manufacturing operations in the US, Europe and Asia, the thin-film leader has successfully continued to compete against Chinese producers. First Solar has also been in long-standing negotiations to build massive PV power plants in Mongolia, China that could be hindered – or worse – were the company to join such a petition.

However, speculation continues to surround several other US companies, with Solyndra and Evergreen Solar being classed as possible petitioners. Both companies have been involved in high-profile bankruptcies, and both had claimed that their bankruptcies were a result of competition with Chinese PV suppliers.

As both Solyndra and Evergreen Solar have entered Chapter 11 bankruptcy, they continue to operate as businesses and therefore eligible petitioners. Speculation has also centred on struggling thin-film manufacturers such as ECD as potentially being among the unidentified petitioners. The company has recently stopped production completely to combat high inventories and weak demand as conventional crystalline module prices dropped to three times lower (on a cost-per-watt basis) than ECD’s flexible thin-film products.

The Chinese PV group noted that, “The solar industry in the US generates approximately 100,000 jobs, while in comparison SolarWorld provides only 1,000 jobs. If the US market were denied access to the PV cell products of competitive prices, other 99,000 jobs would be put into a dangerous situation. That is exactly why SolarWorld’s petition is opposed by US companies from upstream raw material and equipment suppliers to downstream distributors and users, environmental protection organizations and climate experts.”

“SolarWorld, the lead petitioner of the ongoing AD/CVD investigations, is a US subsidiary of a German company, not an indigenous US company, and the other six petitioners even have never identified themselves publically. Therefore, these petitioners only account for a very small fraction of the US PV companies, and cannot represent the position of the mainstream US PV companies.”

Nevertheless, the Coalition for American Solar Manufacturing (CASM), which was set up to support the US government's investigation, said on November 28, 2011 that it claimed a total of seven US solar (cell and module) manufacturers had joined its support campaign. This is now said to have grown to include a total of 150 solar businesses, employing more that 11,000 employees.

With battle plans being made at a rapid pace, support for opposing the investigation and calls for the complaint by SolarWorld to be withdrawn are now being voiced by the Coalition for Affordable Solar Energy (CASE).

The Chinese group’s initial statement put company membership at 101 US companies covering every segment of the US solar industry chain. However, the last press release issued by CASE on November 17, 2011 claimed a membership of 52 companies that represented more than 9,600 jobs, or nearly 10% of the US solar industry workforce. With support momentum building on both sides, it is not inconceivable that CASE membership has doubled in such a short time.

Update
 
On December 1, 2011 CASE announced that its membership doubled in its second week and that after three weeks membership stood at 132 companies and represented 13,134 direct solar employees at those solar firms, or 13% of the U.S. solar industry workforce. (Update end)
 
On more contentious grounds, the statement from leading Chinese producers raised counter claims over SolarWorld’s having been a recipient of many government support programs in the US and Germany.

“Incomplete statistics show that SolarWorld received tax breaks and public subsidies worth of US$43 million in the US in one single new facility project in Oregon in 2007, and received governmental aids in the amount of €73.15 million, €18.75 million and €45 million in the EU in 2003, 2010 and 2011 respectively.”

The statement goes on to further target SolarWorld, highlighting claims that the company had been profitable in 2010, and that its lay-off of employees in its California facilities was due to its relocation of facilities to Hillsboro, Oregon, inferring these had nothing to do with unfair practices by Chinese suppliers.

However, the statement failed to note that SolarWorld plans to idle its facility in Hillsboro for three weeks at the end of the year.

The statement also claims that SolarWorld’s third-quarter 2011 financial statements highlight that the company increased its workforce by 11% in 2011, in an attempt to dispute claims that SolarWorld had any cause to make a petition against Chinese PV producers. 

Various references in the statement were made to previous issues raised about the whole industry’s being impacted by potential duties, not least US firms as outlined by CASE previously.

“Therefore, if the US Government imposed any definitive trade restrictive measures it would cause significant losses to the upstream and downstream industries and consumers in the US, only to the benefit of a small fraction of US PV cell companies such as SolarWorld.”

Emphasis was also placed on claims that Chinese PV manufacturers had played an important role overall in the development of the PV industry in the US.

Therefore, the group was positioning itself as supporters of the US PV industry, against a trade war with China and that, “their fight in the investigations is directed against the few petitioners led by SolarWorld only.”

Time is pressing for both sides of this bitter battle as the ITC may provide notification of a preliminary determination on December 5, 2011, though full-findings could be several months away.

Ironically, another pressing issue that also affects the entire industry involved in the PV industry in the US is the need for a one-year extension to the Department of Treasury’s Section 1603 Program, which has provided tax compensation on renewable energy installations.

The program is due to expire and supporters numbering over a claimed 750 companies are pushing the US Congress to continue support as it is claimed has leveraged US$23 billion in private sector investment to support over 22,000 projects in all 50 US States and generated many thousands of new industry jobs. 

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