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International Trade Commission (ITC) investigates Chinese solar practices again

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International Trade Commission (ITC) investigates Chinese solar practices again

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Recently US officials have launched new investigations into Chinese solar trade practices. The investigations announced by the US Commerce Department are in response to a December petition by SolarWorld. They claim that China is exploiting a loophole in a 2012 trade ruling, through using cells made abroad, mainly from Taiwan. SolarWorld is asserting that the Chinese are avoiding the US anti-dumping and countervailing duties.

The two aspects of the anti-dumping tariff refers to the act of selling goods abroad at prices below their normal value. Countervailing duties are meant to combat unfair subsidies to producers and are also known as anti-subsidy duties.

Imposing duties

Following a year of investigation in 2012, the Commerce Department found evidence of both dumping and illegal subsidies. They imposed duties on Chinese made solar cells to counter dumping and anti-subsidies. The new investigation focuses on imports of certain silicon (crystalline) products, which are the basic components of solar panels, including laminates.

The US International Trade Commission (ITC) will make a preliminary injury determination by February 14th to evaluate whether the investigations will continue. If the US ITC does find “reasonable indication” that such imports cause material injury to US producers, “or threaten to do so” the US Commerce will then proceed with its investigation, and would announce preliminary countervailing determinations in March and its anti-dumping findings in June. How does the tariff affect the entire solar PV industry?

Discontent towards SolarWorld for disrupting solar industry

Generally there is a lot of discontent towards SolarWorld throughout the solar PV industry, because developers, EPCs, financial institutions and project owners are most effected by the tariff. Instead of being able to purchase solar PV at more competitive prices, SolarWorld has continually invested money into attorneys to help their company win business via the tariff. SolarWorld’s legal action of placing anti-dumping charges on the entire solar industry is a selfish act, which they believe helps them competitively. It is amazing that a company that has gone chapter 11, continues paying attorneys instead of paying their suppliers and their debt.

Many solar participants along the supply chain believe these investigations actually causes more harm towards the US solar energy production than good. Imposing duties on foreign manufactured cells, can actually raise costs for US developers, EPCs and solar project owners as they use the end product of cells, the panels. Rhone Resch, CEO of the Solar Energy Industries Association (SEIA) said, “We oppose the December’s escalation of the US versus China solar trade conflict,” responding to the SolarWorld petition. “It’s time to end this conflict, negotiations should play a role.”

Repeated tariff arguments between the US and China

The past two years have been tense with repeated arguments between the US and China over their renewable energy trade practices. US PV panel manufactures struggle because of lower priced Chinese products. Unfortunately, the US government is at fault as they opened the door for Chinese manufacturers. Solar PV got its start in the US. The mistake of not investing in manufacturing in the US by the government is what got us where we are today. When the US did invest they picked the wrong solar technology. Because the US has not focused on building manufacturing internally, it has allowed countries such as China and Taiwan to win the lion’s share of solar manufacturing. Why do we have a tariff?

The Chinese manufacturers were found to sell below cost and receiving unfair subsidies, but that has nothing to do with Taiwan. Taiwanese solar cell makers insisted that they have not engaged in dumping practices, noting that the prices of Taiwanese made solar cells are 8% above the global average. Addition, the prices of Taiwan's products exceed those from China by 11%. Unfortunately, SolarWorld only cares about disruption at any cost and wants to point negativity towards all others manufacturing except for hidden partners.

Chinese respect minimum import prices

Under the terms of the agreement, participating Chinese exporters have committed to respecting minimum import prices. Non-participating Chinese companies are, however, subject to a 47.6 percent average anti-dumping duty.

What propels the US to place tariffs on Chinese solar PV is that the market is on track to triple by 2020. Additionally, many of you have read my articles where I have predicted that solar will be at least 50% of the energy produced in the US by 2050. The combination of where we are and where we are going creates a natural conflict when one nation can produce cheaper than another.

In conclusion, in a few days we will know the initial outcome from the ITC. If they decide to continue the investigation the Chinese manufactured panels could be levied with additional fees. There is a likelihood that they will also levy retroactive fees as well based on their 2012 findings. It seems unlikely for the findings to include Taiwan because there is no factual proof of selling goods below cost and unfair subsidies.

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