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Ful l news service at http://www.renewableenergyfocus.com
NewsAnalysis
November/December 2011 | Renewable Energy Focus
more than 350% from 2008 to 2010.
Exports in July 2011 alone exceeded
those from all of 2010. From 2008
to 2010, Chinese volume of cells and
modules surged by 358%, far beyond
the percentage increase in actual
installations, and at prices that were
well below the domestic industry’s.”
Gordon Brinser, president of Solar-
World told the ITC at a public hearing
this week, “even for China this kind of
tremendous volume increase is remark-
able. Massive Chinese underselling of
these import volumes has caused U.S.
prices to fall by 40% to 50% in the
last 12 months, and these dumped and
subsidised Chinese imports have caused
material injury to the US industry.
“The Chinese industry, backed by
its Government, has made no secret
that it would use dumping and subsi-
dies to take over this market...notably,
they want to take the U.S. market at
precisely the point where it is poised
for strong growth...this should be a
booming U.S. industry, adding thou-
sands of jobs. Instead, it is fi ghting for
its very life.”
In August, Solyndra and a num-
ber of other American solar energy
companies fi led for bankruptcy, citing
competition from low-cost Chinese
modules. In September, SolarWorld
closed its Camarillo facility in Califor-
nia, which had been making crystal-
line silicon since the fi rst solar boom
in the 1970s.
Tim Brightbill, an attorney for
SolarWorld’s lawyers Wiley Rein
believes that the U.S. industry has a
strong case:
“The three elements that are being
considered are: dumping, subsidies and
injury. We have an extremely strong
case on all three of those fundamen-
tal components. The level of subsidies
that we’re talking about in the Chinese
solar industry is virtually unprece-
dented. We’re talking about more than
US$40bn in either loans or directed
credit, including billions of dollars to
individual companies. It’s just on a
scale that is unheard of compared to
other industries.”
Lack of supportBut few companies from the
U.S. and China have taken CASM’s
side. U.S. representatives of leading
FIERCE COMPETITION in
the solar industry between
China and the U.S. took a step
closer to becoming an all-out trade
war this month, after the U.S. opened
an anti-dumping and countervailing
duty investigation into PV exports
from China.
SolarWorld Industries America,
the largest PV producer in the U.S.,
together with an (as yet) unnamed
group of solar companies making up
the Coalition for American Solar Manu-facturing (CASM) – has fi led a petition
alleging that Chinese manufacturers
are dumping solar modules onto the
U.S. market, with margins in excess of
100%. It also claims that the Chinese
Government is giving its manufactur-
ers illegal subsidies and credit lines
worth US$40 billion.
SolarWorld’s legal challenge has a
good chance of success with the US International Trade Commission (ITC), which will imminently deter-
mine whether “material harm” has
been caused to U.S. industry.
But SolarWorld’s action has not only
angered Chinese manufacturers, which
could result in duties of US$1bn on
Chinese PV imports. It has also divided
the U.S. solar industry, over fears of job
losses due to increased costs.
The U.S. subsidiary of the Bonn-
based company said that China had
more than doubled its capacity - from
6GW to 16GW between 2009 and 2010.
Ninety percent of its output, it said,
was destined for the U.S. and Europe,
despite a domestic target of 20GW by
2020.
Market analysts Solarbuzz
estimates that in the last decade,
prices per Watt have dropped from
US$5.40/€5.47 in December 2001, to
US$2.49/€2.33 in November 2011.
Thomas Maslin, a senior analyst at
IHS Emerging Energy Research, said
that prices had dropped dramatically
so far this year:
“We have seen a pretty substan-
tial price collapse in panels, with
prices coming down 30% or more,
on an average basis over the course
of this year. There has been signifi -
cant capacity expansion in China,
and only moderate expansion in the
U.S. and the EU. Growth of demand
has not kept pace, particularly in
Europe, where the general fi nan-
cial situation is such that nations
are really pulling back on their
incentives.”
SolarWorld’s petition claims that
“Chinese exports of crystalline silicon
solar cells and panels to the U.S. rose
When two tribes go to war
REF126p34_37_REVISED.indd 35 12/6/2011 10:49:33 AM
News Analysis | Full news service at http://www.renewableenergyfocus.com
36 November/December 2011 | Renewable Energy Focus
Chinese manufacturers Suntech,
Yingli Green, and Trina Solar, joined
U.S. developer SunEdison and U.S.
manufacturer MEMC, in giving testi-
mony to the ITC.
Richard Weiner, attorney at Sidley,
told the U.S. ITC panel: “to the extent
the petitioner is suff ering injury…that
injury is caused by the company’s own
poor supply chain management, which
has locked SolarWorld into undesir-
able contracts for key inputs, such as
polysilicon.
“The petitioner has launched an
ill-advised attack, threatening the
foundation of an entire U.S. industry.”
Since the hearing, industry
opposition to the SolarWorld chal-
lenge has galvanised into the Coali-tion for Aff ordable Solar Energy (CASE), including manufacturers that
appeared before the ITC, and devel-
opers such as SolarCity, Sungevity,
SunRun and SunEdison.
Jigar Shah, a founding member of
CASE and SunEdison, said, “Solar-
World is alone here. The rest of the
players on SolarWorld’s side have
stayed anonymous. It’s unclear how
many manufacturers are really siding
with [them]. Most manufacturers
would like to avoid a trade war if pos-
sible. They would rather have more
aff ordable solar panel prices”.
Shah admits that CASE has an
“uphill battle” as the US Department of Commerce, which will investigate
the case, has “never sided with China
on a complaint”.
“But we think it’s worth fi ghting,
because we think 100,000 jobs are
worth saving in the U.S. We’d like to
see the downstream solar industry
of 5,000 companies in the U.S. not be
turned upside down by the Depart-
ment of Commerce.”
If the ITC does rule in SolarWorld’s
favour, the Department of Commerce
could set a very low tariff , or Solar-
World may feel pressured into submis-
sion, he said.
“They can set damages at a low
level - 1.5% tariff settlement out of
court. If SolarWorld comes to the table
and realises that they’re literally losing
the respect of almost everyone in the
downstream that buys from them, they
might say ‘we have to settle’.”
Shah, who is also the chief execu-
tive of Sir Richard Branson’s Carbon War Room, said that allegations of
dumping should be investigated, but
doubted that the Chinese companies
really conduct business in this way.
He said: “if people really are illegally
dumping we hope that gets dealt with.
But many of the Chinese solar compa-
nies...are publicly traded to the extent
that [if] they have positive gross
margins as a business then they’re not
dumping. If they are making money
from solar panels, then they’re not
dumping.”
Is this sustainable growth?But unbridled growth will ulti-
mately harm the industry, and the
SolarWorld challenge could usher in a
new era for a sustainable solar indus-
try, believes Brightbill.
He said, “the best thing for the
solar industry is to have a sustain-
able manufacturing base and a strong
industry. Basing your business plan
on the use of dumped and subsidised
products is not a long-term viable
solution. The U.S. solar industry has
been extremely successful in terms
of reducing [its] costs and reducing
its pricing every year, and demand is
going up as a result. But when Chi-
nese imports cause prices to fall 40%
– 50% in one year that is just unsus-
tainable. And that is not good for the
solar industry in the long term.”
As part of its investigation the
Commerce Department will request
that Chinese producers report all
costs and information on subsidies,
and the Chinese Government will be
required to report all of the subsidies
it provides. U.S. producers and the
Government will have to do the same.
The investigation could yield
some interesting results. Although
SolarWorld claims to have taken no
federal subsidies, Oregon subsidised
50% of the costs of its Hillsboro
factory, according to Shah. Treasury
records show that SolarWorld claimed
US$82,200,000 in 48C manufacturing
tax credits for its Hillsboro facility, to
“expand the existing 100 MW solar
PV manufacturing plant to 500 MW”.
Meanwhile, in China the petition
has been met with outbursts of unusu-
ally passionate objections, as manufac-
turers fear the door to the U.S. market
will be slammed in their faces.
Press reports have characterised the
U.S. solar industry, as “a land swarming
with famished refugees”, a provocative
statement on how the Chinese view
the U.S. market, according to Louis
Schwartz, a lawyer at China Strategies: “The Chinese refer to ‘cabbage pric-
ing’, cabbage being one of the cheapest
vegetables there is, and they use that
language to describe how their own
solar industry was pricing modules…
one of the eff ects was to keep lowering
the prices to increase the volume in
the U.S. and other markets.”
China only introduced a US$0.15
per kWh feed-in tariff for solar in
August, but incentives for the domes-
tic market should have come sooner,
said Schwartz.
“There’s no question that their
gander is up. But the Chinese should
have seen the writing on the wall,
and they probably should have reined
in their own industry. They could
have increased domestic purchases of
solar equipment. Maybe they should
have revved up [the feed-in tariff ] at
a faster pace. But they should be a
little more sensitive to the eff ect that
they’re having on the world.”
Maslin at IHS EER said that the
best that SolarWorld and the rest of
the industry can hope for is economic
recovery.
He said: “SolarWorld is a global
company and they are facing these
issues throughout the world. I’m not
hopeful as to a specifi c outcome. In
this market things change so quickly.
They change much faster in terms
of the dynamics of the market than
you’re likely to see any national-level
U.S. policy change. Their best hope
is that the conditions of the market
change. And that demand outstrips
supply again and they are back in the
money at some point.”
About: Felicity Carus previously worked on the environment desk at the UK’s Guardian newspaper. She covers renewable technology and clean energy policy and fi nance out of San Francisco, CA.
The [CASM] challenge could usher in a new era for a sustainable solar industry
REF126p34_37_REVISED.indd 36 12/6/2011 10:49:39 AM
