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05 Dec 2011
Unanimous vote means that investigation into imports of PV cells and modules from China will continue, bringing a trade war one step closer.
The US Department of Commerce (DOC) will continue to investigate imports of crystalline silicon solar cells and modules from China, after a unanimous vote by the US International Trade Commission (USITC) determined that there is a “reasonable indication that the US [solar] industry is materially injured” by those imports.
All six USITC commissioners voted in support of that determination, meaning that anti-dumping and countervailing duty investigations by the DOC will continue, with its preliminary findings due for publication around January 12. Ultimately, extra duties could be imposed on the imports by the US authorities.
The case, brought by the Oregon-based subsidiary of Germany’s SolarWorld and six other un-named US manufacturers, alleges that the cells and modules made by the likes of Suntech Power are subsidized by the Chinese government and sold at less than fair value in the US.
Following the USITC vote, the Coalition for American Solar Manufacturing (CASM), which represents the seven US companies that brought the case, applauded the decision, saying: “Without any production cost advantage, dumping by Chinese solar manufacturers and massive subsidies by the Chinese government are enabling Chinese producers to drive out US competition.” The CASM quotes US Department of Energy estimates that China provided some $30 billion in subsidies to its manufacturers in 2010, with Suntech alone receiving some $7 billion.
The Chinese companies have denied that allegation, while the Chinese Ministry of Commerce responded to the USITC announcement immediately, saying it was “deeply worried” by the development, and accusing the US of protectionism. It says that US companies are simply less competitive than their Chinese rivals, while the major lines of credit available to Chinese manufacturers are said to be largely undrawn.
Letter of support
The CASM’s case has the support of 59 members of the US Congress, largely representing the states in which the US manufacturers are based. In a letter to President Obama in support of the CASM case, they detailed the alleged subsidization, pointing to “massive loans at below-market interest rates”, “cheap or free land from local or provincial governments” and “extensive tax breaks” as unfair practices that had contributed to the closure or down-sizing of at least seven US solar companies over the past 18 months.
The letter also points to the long-standing dispute between the US and China over currency valuations, something that is said to give Chinese manufacturers a 28% price advantage. “Given that China exports 95% of the solar panels that it produces, these government policies clearly distort international trade,” the letter states.
Market analysts at the PV industry research firm NPD Solarbuzz now say there are signs that the dispute is already having a negative impact in the fast-growing US PV market: “The SolarWorld petition has split the US PV industry, with clear evidence that some Chinese manufacturers and project developers have already started to delay shipments and installations,” states Solarbuzz in its latest quarterly report. Taken together with the expiration of a key federal cash grant in the US, it says that any deferral of module supplies by purchasers trying to predict a price bottom will impact PV market growth in 2012.
Fast-growing North American market
Even so, the US and Canadian markets remain among the fastest-growing in the world at the moment, with Solarbuzz president Craig Stevens saying: “PV is now positioned to take significant market share from other energy sources as it approaches grid parity in some regions [in North America].”
In the closing quarter of 2011, Stevens expects the North American PV market to grow by an astonishing 33% sequentially, more than doubling over the final quarter of 2010 as some 800 MW of peak generating capacity is installed. The US accounts for around 85% of that total, with the Ontario region of Canada making up the rest, thanks to its attractive feed-in tariff.
California provides the largest single market in the region, with a 21% share, followed by Ontario with around 16% and New Jersey with 11%.
For 2011 overall, Solarbuzz now expects some 2.2 GW of peak PV capacity to be installed in North America – with 1.9 GW of that total in the US. If correct, it would mean that the US market had doubled for the second consecutive year.
And that may just be the start of the boom: regardless of the current uncertainty surrounding supply, and the possibility of a trade war breaking out, the analyst firm suggests that the North American PV market will still triple in size by 2015.
The latest North America PV Markets Quarterly report is now available from Solarbuzz.
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