The long and winding road to this final determination imposing anti-dumping and countervailing duties against Chinese manufacturers has finally been reached. The US Department of Commerce (DoC) has announced that Chinese producers/exporters have sold solar cells in the United States at dumping margins ranging from 18.32% to 249.96%. The DoC also determined that Chinese producers/exporters have received countervailable subsidies of 14.78% to 15.97%. This is approximately the same as the ruling in May and in some cases 10% lower.
In the AD investigation, Suntech was determined to have a final dumping margin of 31.73%. Trina Solar Energy was determined to have a final dumping margin of 18.32%.
Fifty-nine other exporters qualified for a separate dumping rate of 25.96%. All remaining Chinese exporters received a final dumping rate of 249.96%.
Furthermore, in the CVD investigation, Suntech and 10 of its affiliates were determined to have a final net subsidy rate of 14.78%, while Trina Solar was determined to have a final net subsidy rate of 15.97%.
All other Chinese producers/exporters received a final net subsidy rate of 15.24%.
Last week the International Trade Commission sat through testimonies from executives from American solar manufacturers, distributors and installers including SolarWorld’s Gordon Brinser, US president of manufacturing and Kevin Kilkelly, president of sales in the Americas, accompanied by Steven Ostrenga, chief executive officer of Milwaukee-based Helios USA. Furthermore, SolarWorld is resolved immediately to seek separate, enforcement actions from the DoC to impose duties on panels assembled in China from cells in third countries.
Oregon-based SolarWorld stood centre-stage at Solar Power International 2011 to announce that it, alongside seven other US manufacturers, had lodged grievances against Chinese solar cell manufacturers with both the DoC and the International Trade Commission (ITC). Although most of the members of the SolarWorld-led Coalition for American Solar Manufacturing (CASM) have remained anonymous, Helios Solar Works and New Jersey-based MX Solar came out of the woodwork in March.
A survey published by the Solar Energy Industries Association implies that 82% of the American public agreed with CASM this time last year, but this did not stop the stampede of companies who rose against SolarWorld’s petition.
Regarding today’s decision, E.L “Mick” McDaniel, managing director of Suntech America, told PV-Tech that, “We are pleased with the DoC’s final decision to remove the 90-day retroactivity of tariffs on Suntech products. It was apparent to everyone within the solar industry that abnormal market demand in Q4 2011 was driven by the expiry of the 1603 cash grant program and this ruling reflects the reality that Suntech did not stockpile products to avoid potential tariffs.
“Unilateral trade barriers will not make any one company more competitive, but will make solar less competitive against other forms of electricity generation. These ill-conceived taxes on solar products were the outcome of an unrealistic analysis that compared, for example, Suntech's costs of production to the theoretical costs of production in Thailand, a country with less than 100MW of PV production capacity. It's unfortunate that the process works this way; however, Suntech is well-prepared for the future and to serve the needs of our customers,” said McDaniel.
“As a multinational company with global supply chains and manufacturing facilities in three countries, including Goodyear, Arizona, we will continue to provide our customers in the US with hundreds of megawatts of high-quality and affordable solar products that will not be subject to tariffs,” continued McDaniel.
McDaniel concluded, “The growth of destructive trade barriers represents a significant, long-term challenge to the health of the solar industry in the US and globally. Nobody benefits from a global solar trade war except for those who want a less competitive solar industry.”
Suntech will be exempt from the collection of provisional duty deposits normally collected as of the date of publication of the DoC’s preliminary determination. Instead, anti-dumping duties applied to Suntech will be collected as of the date of publication of the DoC’s preliminary determination.
Barry Broome, president & CEO Greater Phoenix Council, who had previously filed a letter contesting tariffs on Chinese manufacturers with the DoC and ITC, had this to say to PV-Tech:
“I hope the International Trade Commission will see the light behind this complaint and not scale-back the significant opportunities that China represents in terms of US jobs and investment, especially in states like Tennessee and Michigan.
“This decision smacks more of politics than intelligent economic sense and is further proof that the Department of Commerce is in sore need of business people who understand the value of industry and free trade.”
Rhone Resch, president and CEO of the Solar Energy Industries Association (SEIA), continues with his call for diplomacy:
“As we near the end of these investigations, it’s not too soon to take stock of what has been achieved, consider whether opportunities were missed, and, most importantly, start thinking about how to move forward.
“While today’s decision rightly shows that the US will protect its rights in the global trading system, we’re also learning that trade litigation alone is not enough to solve the complex challenges that exist between the US and China. What is immediately clear is that the future must begin with diplomacy.
“If the opposing parties come to the table, even at this late date, and work together to help grow this global industry, the possibilities are endless.”
In November 2011, the battle of the acronyms began. CASM’s shrill outcry brought 25 organizations together to form The Coalition for Affordable Solar Energy (CASE). Aimed as a response to the action SolarWorld was petitioning, CASE argued that the progression of such a petition would inhibit the growth and sustainability of the US solar market.
Preliminary anti-dumping margins were announced in May by the DoC, having been postponed twice already, ranging from 31.14% to 249.96%. However, SolarWorld’s smile of satisfaction was swiftly wiped off its face when the Chinese Ministry of Commerce (MOFCOM) launched its own investigations into various US renewable energy programs in retaliation.
In July, allegations of dumping by US and South Korean enterprises were brought to MOFCOM, on behalf of the Chinese solar industry, by Jiangsu Silicon Technology Development, LDK Solar, Luoyan Sino-Silicon high-tech and New Energy.
IHS’s iSuppli released its PV Perspectives report in May which considered how the US government’s antidumping penalties on imports of PV cells from China would affect the US solar market. IHS noted that the DoC’s May 17 preliminary ruling could suspend Chinese imports by nearly half this year, which would impact pricing, inventories and project timelines. IHS previously estimated that 2GW of solar modules were to be shipped to North America in 2012 from Chinese manufacturers, representing almost 60% of the market for North American use.
The report details how the high tariffs proposed by the Commerce Department will more than likely halt shipments to North America from China while companies look to modify business plans in order to account for the tariff. IHS estimated that this would represent the temporary removal of up to 1.5GW, or 45% of the total market in 2012.
CASM corroborated this report in August stating that Chinese solar imports were down by 60% since June 2011, totalling US$99.6 million from US$241.5 million.
Gordon Brinser, SolarWorld president defended his position when testifying in front of the ITC last week, “While demand has clearly increased over the period, shutdowns, lost sales and revenues, production declines and layoffs of American workers have become all too common for SolarWorld and the rest of the domestic industry.
“China’s massive, government-funded solar capacity has caused this material injury.”
Notwithstanding, it is important to note that while the top companies in China continue to gain market shares, the lesser-known Chinese solar manufacturers have been subjected to the same shutdowns that have recently affected companies such as centrotherm and Abound Solar, however, unless they are publicly traded, most do not announce their closures or other big operational changes.
According to Steven Han, an analyst at NPD Solarbuzz, “The agricultural PV market segment in China was previously overlooked by downstream PV suppliers and installers. However, with the threat of anti-dumping actions from the United States and Europe potentially restricting their available sales channels, creating additional demand locally is now essential for both module and balance-of-systems suppliers.”
Sources close to PV-Tech have expressed concern that the DoC’s determination today has been influenced by the fast approaching US elections.
Below is a comparison of the preliminary determinations with the final determinations from the DoC:
|Exporter||Preliminary DoC determination||Final DoC determination||Cash deposit rate|
|Exporter||Preliminary DoC determination||Final DoC determination|
The ITC is scheduled to make its final determination on or before November 23, 2012. If the ITC makes an affirmative final determination that imports of solar cells from China materially injure, or threaten material injury to, the domestic industry, DoC will issue AD and CVD orders on November 30. If the ITC makes a negative determination of injury, the investigations will be terminated.
We now wait to see how the outcome of this determination could affect both the EU Commission and India’s investigations against Chinese solar manufacturers.
Comments from the industry:
Solar World and CASM:
“SolarWorld and CASM have fought only to give the solar-pioneering domestic industry a fair chance to continue to compete by removing China’s trade distortions from the US market,” said Gordon Brinser, president of SolarWorld Industries America.
“Only fair competition can provide sustainable gains in technological efficiency, cost reduction and end-user pricing. Commerce’s decision raises the industry’s chances of reclaiming equal footing for domestic, sustainable and environmentally sound solar-technology producers and their jobs.”
Trina Solar continues to actively defend its position before the ITC. At the end of these cases, Trina Solar states it will consider whether it is necessary and prudent to appeal the final determinations issued by the DOC or the ITC.
“While we disagree with the Department of Commerce's conclusions in this case, we will abide by their decision and look forward to the ITC's final ruling on this issue in November,” said Jifan Gao, chairman and chief executive officer of Trina Solar. “We are a strong, resilient company and we will continue to innovate, drive technological advances and bring clean energy to the US and around the world.”
“We highly value our US customers and business partners and their loyal support throughout this process,” said Mark Mendenhall, president of Trina Solar Americas. “We look forward to final resolution of this case and will continue to build strong relationships and to grow our North American business to meet our customers' needs.”
The Commerce Department’s final decision on solar tariffs does not really change the fundamental outlook for solar companies, in our view, as it would still be possible for these companies to buy cells from Taiwan, convert them into modules in China and avoid the current tariffs. This decision however increases the likelihood of potential reaction from China (recall that China is investigating duties on poly imports from the US) and also makes the case for EU tariffs a lot stronger. We see no change to pricing outlook – despite the current tariff provisions, module pricing in the US has continued to decline.
Checks indicate module prices from tier 1 suppliers are now ~US$0.70/W.
Yingli Green Energy
In a statement to PV-Tech the company noted that:
“Should Yingli Green Energy export modules or cells produced entirely in China to the US they would be part of the separate rates group, and would be subject to an anti-dumping tariff of 15.42% (after the required reduction in the rate to avoid double counting of anti-subsidy tariffs) and an anti-subsidy tariff of 15.24%.
“These rates are lower than what was proposed in the preliminary decision.”
Robert Petrina, managing director of Yingli Green Energy Americas said, “Throughout this entire proceeding we have defended ourselves and the US solar industry and we are grateful to our loyal customers, suppliers, partners and their employees who have united in our defense.
“We are looking forward to getting back to our daily business, focusing on innovation and outstanding customer support.”
“The potential of the US solar market is vast and we remain dedicated despite the industry’s challenges throughout this past year,” said Liangsheng Miao, chairman and chief executive officer of Yingli Green Energy.
“We will always be appreciative to the overwhelming majority of the American solar industry who stood behind us and the other respondents.”
To clarify, Yingli stated that it received 15.42% as its dumping margin and 15.24% for countervailing duties with a total of 30.66%. The company's preliminary decision was 34.79%.
Jigar Shah, President of CASE, stated, “We are gratified that the scope of today’s decision is limited only to solar cells made in China and that the Department did not significantly increase the tariff from its preliminary decision in May. We are hopeful that continued innovations in technology, a competitive global marketplace and demand-generated pressure for lower prices will take precedence moving forward. At the same time, we remain concerned about the growing global trade war, which will only hurt American solar industry jobs, growth and consumers.
“We believe that global competition is good for American solar consumers and companies. Fortunately, these tariffs will not stop the development of American solar energy, which 92% of the American people want to see developed even more, according to a recent national poll. On behalf of 97% to 98% of the US solar industry that fought against SolarWorld, we are all looking forward to ending this distraction and returning to our everyday focus of creating jobs and lowering renewable energy costs.”
“As one of the largest solar companies in the world, with a global supply-chain and manufacturing facilities in two continents, Canadian Solar has consistently adhered to fair trading practices,” said Dr. Shawn Qu, chairman and chief executive officer of Canadian Solar. “Over the past several quarters we have maintained a laser focus on initiatives to reduce our manufacturing cost to meet the competition in the global solar energy market place. We have benefited from the decline in our raw material costs, especially silicon, and also from improvements in our cell conversion efficiencies, and from economies of scale, which combined have contributed to Canadian Solar securing its position as one of the world's lowest cost manufacturers of solar photovoltaic modules.”
“Our efforts have contributed to making electricity generated by solar photovoltaic modules more competitive with fossil-fuel alternatives worldwide. Bringing down the price of solar modules has been critical to expanding solar installations in the US so we can reduce the use of fossil fuels, and reduce reliance on imported oil. Lower solar module prices in the US have also contributed to employment growth; the US solar industry now employs more than 100,000 workers, with the vast majority employed in downstream positions in project development, logistics, construction and installation, which directly benefit from lower solar panel prices,” continued Dr. Qu.
“While we are disappointed with the DOC final determination, we will continue to defend our position with the ITC ahead of its final determination in November. We will also remain committed to the US solar energy market, leveraging our global supply-chain to provide fairly priced solar energy solutions, to support our employees, partners and customer base,” concluded Dr. Qu.