We look at the European Union tariffs now imposed on
imported Chinese panels and how some PV makers are reporting an upswing in
sales as a direct result of the protectionist measures.
The European Union (EU) is officially imposing tariffs
on imported Chinese solar panels in an effort to protect its own module makers.
European Commission (EC) Trade Head Karel De Gucht is recommending that the EC
impose anti-dumping (AD) charges similar to those imposed last year by the
United States, according to Reuters.
But what did the EU actually uncover in its
investigation? A Bloomberg report summarised it nicely: “The investigation
covered EU imports of crystalline silicon photovoltaic (PV) panels, cells, and
wafers valued at $27.6bn in 2011, which amounted to more than half the global
PV market. The Chinese companies owned almost no global PV market share in
2004, but controlled 80 percent of the global market by 2011.”
The tariffs that will now be imposed will average 47.6
per cent for the more than 100 Chinese manufacturers found by the EC to have
been involved in the dumping, but will vary by the extent of the manufacturer’s
dumping and the extent of their cooperation with the EC’s investigation, news
reports by the Wall Street Journal (WSJ) wrote.
Those that will feel the most pain, include Suntech
Power Holdings its subsidiaries (tariffs of 48.6%); LDK Solar (55.9%); Trina
Solar (51.5%) and JinkoSolar (58.7%). Those companies that decided against
cooperating with the EC investigation will be fined heavily at 67.9%, according
to WSJ.
Chinese tariffs already paying off in EU
But in the run up to this EU decision to impose
tariffs, how were European companies reacting and was there anything to gain in
all of this other than greater peace of mind going forward that they will have
a fairer share of the market?
At least one company has no complaints about European
Community (EC) moves to slap taxes on cheap imported Chinese PV panels.
Innotech Solar, a Scandinavian-German supplier of
“environmentally friendly modules with optimised solar cells”, claims business
is picking up nicely thanks to EU ruminations over tariffs for imports from
China.
Officials declared in March that the EC would start
registering Chinese wafer, cell and module imports, and decided this month to
impose tariffs.
But Innotech asserts the uncertainty surrounding the
outcome has already been enough to lift its sales.
“The company is benefiting from
the increased demand for European solar modules from distributors who want to
avoid paying backdated anti-dumping duties for purchasing modules made in
China,” said Innotech in a press statement.
It claims to have picked up new
contracts with six distributors in recent months and is increasing production,
with a medium-term aim of achieving a total capacity of 170MW.
Changing strategy
In press material, Dr Thomas
Hillig, vice president of module sales and marketing, explains: “Many
distributors are currently changing their strategy.
“As potential anti-dumping
duties are making it unclear who will provide the cheapest solar modules in the
future, distributors are including more and more products with unique selling
points in their product portfolios to allow them to compete on factors other
than price alone.”
Hillig adds that in 2012
distributors always focused directly on the price. Now Innotech is selling
modules based on factors such as a low carbon footprint, high yields in warm
ambient temperatures and suitability for east-west-oriented roofs.
Innotech makes modules using a
thermal imaging process that it says restores the performance of low-efficiency
solar cells to their full capacity.
The company optimises solar
cells from different manufacturers in the German city of Halle an der Saale and
manufactures its modules in Glava, Sweden. Apart from its ethylene vinyl
acetate film, which comes from Japan, Innotech only uses components from
European manufacturers.
Scott Burger, a solar analyst
at GTM Research solar, agrees the EC anti-dumping announcement has rattled
distributors, but hints that this may not be the main reason why some
manufacturers are enjoying increased sales.
Market uncertainty
“I would say there are a few
things at play here,” says Burger. “Firstly, the market was very shaken up and
nervous following the March announcement. This has caused some uncertainty in
the market despite the lack of precedent for the EC imposing retroactive
duties.”
However, he adds: “I think the
market has settled since the initial announcement. Prices have stabilised and
didn't rise significantly in the first quarter. This suggests that even if EU
manufacturers are increasing production, they are likely doing so at painful
prices.
Burger says GTM has not heard
many reports of significantly increased utilisation from EU manufacturers and
“our channel checks assume that tariffs will be minimal and that the cases will
likely be solved diplomatically.
According to Burger, even with
the EC anti-dumping and countervailing tariffs being imposed in the 20% to 30%
range on cells and modules, there are options for Chinese manufacturers to
continue to supply the market.
So what is going on at
Innotech, then? While anti-dumping fears may certainly be at play, distributors
could have other motives for signing up with the module maker. One of them is
apparent in further comments from Hillig.
Economic stability
“The cost benefits brought
about by our special production process means that, unlike many other
manufacturers, we have a positive cash flow,” he says. “This economic stability
was a further crucial factor which resulted in our new distributors deciding to
work with us.”
Ultimately, then, it seems that
while European anti-dumping moves may be having some beneficial effects for
some module makers, it is too early to claim a benefit for the EC solar sector
as a whole.
Instead, there is evidence that
some vendors, such as Innotech, are managing to find niches of opportunity in
what has hitherto been a pretty bleak market for some time. Over at Kyocera,
for example, the east is not synonymous with threat, but with opportunity.
“Kyocera has a production
facility in the Czech Republic, which was built to satisfy the demand in
Europe,” says Daniela Faust, manager of corporate communications.
“But since the demand has
dropped in Europe because of cutbacks in feed-in tariffs, in particular in Germany and in other countries as well, the factory in the Czech Republic is
fully booked for the production of modules in Japan.”
Hence it is market dynamics
rather than government intervention that is driving production at Kyocera. The
chances are this will remain the case for other manufacturers, too.
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