Some observers state that the U.S. March tariff imposition on solar panel materials imported from China might serve to rankle their Asian counterparts more than serve as a counter-weight or relief mechanism for U.S. solar makers. No matter the future implications, U.S. solar makers can at least find solace in the imposition of this new "modest-sized" tariff on Chinese solar materials. That's because any go-to-market relief U.S. companies can get to not only survive but conduct business in a profitable, growth-driven manner is at least a step in the right direction.
The tariffs, which were announced in late March by the U.S. Commerce Dept., range from 2.9 percent to 4.73 percent, far less than the 20 percent minimum increase analysts had expected. Commerce Dept. officials said the tariffs are a response to the ample subsidies Chinese solar manufacturers enjoy from its government, which critics denounce as an unfair competitive advantage for the Sino solar conglomeration.
To wit: the U.S. imported more than $2 billion worth of Chinese solar cells and panels last year, twice the amount imported in 2010 and up from $21.3 million in 2005.
End-users undoubtedly love the ultra-competitive environment in the marketplace, as it enables commercial, institutional and residential end users to ramp up their solar projects quickly and efficiently. Many of them might cast a blind eye to the tenuous fortunes (ie. loss of profit) of U.S. solar makers, but here's the thing: There has already been a fallout in the domestic solar manufacturing industry, with some companies either going out of business or forced to consolidate. Inevitably, this is all seen as a precursor to a universe that will consist of fewer and fewer solar manufacturers and, thus, less competition for end-users to enjoy.
Rankling China might have the potential to carry other negative ramifications affecting U.S.-China relations, but for now U.S. solar makers must applaud any type of relief they can get to not only survive but to conduct business in a profitable, growth-driven posture. To comprehend the trend of discomfort felt by some of the U.S. players, a recent report by clean energy news provider Clean Technica.com articulates it well.
Take, for instance, Helios Solar Works, a Milwaukee-based solar maker. Demand had been initially brisk for high-end monocrystalline silicon solar photovoltaic (PV) panels manufactured at a new, highly automated 50-MW capacity factory on a brownfield industrial site, according to Clean Technica.com. This demand had been brisk until last summer when Helios Solar Works founder Steven Ostrenga began noticing “a deep dive in [solar panel] pricing coming out of China that we just couldn’t meet,” Clean Technica.com reported.
Helios’ silicon solar PV manufacturing business got off to a good start, and the company added a second shift, bringing its workforce to 34 during the summer of 2011. That’s when heavily subsidized imports from China surged into the US market, bringing prices below Helios’ cost of production, as well as the cost of production in China. Helios and fellow Coalition for American Solar Manufacturing (CASM) members made this assertion when they unfair trade petitions filed with the U.S. Commerce Dept. and International Trade Commission.
The company refers to itself as an “automated manufacturer” that hires talent across a broad job spectrum: MBAs and electrical engineers, accountants, people with technical degrees and skills and high school grads. Some 23% of all jobs in Wisconsin are tied to manufacturing.
Helios Solar Works is among a growing number of solar PV manufacturers that “have been forced to downsize as a result of dumped and subsidized Chinese imports of solar cells and modules,” according to a CASM press release.
Asian Surge, Domestic Strife
Surging imports of Chinese silicon solar cells and modules in 2011 resulted in an abrupt reversal of what had been one of the rare instances of a U.S. trade surplus with China. The U.S. balance of trade in the solar PV sector as a whole was a negative $1.635 billion in 2011. That compares to a surplus of between $247 million and $539 million in 2010.
Having initially found in favor of CASM’s petitions, a Commerce Dept. ruling on the imposition of countervailing duties was expected to be made public last week. A Commerce Dept. ruling on Chinese dumping of silicon solar PV in the U.S. is going to be delayed until May, according to an unofficial notice CASM’s legal team at Wiley, Rein recently received from the Commerce Dept.
The steady decline in solar PV prices has been benefiting buyers and solar energy systems developers and integrator over the short term. This price plummet has been moving up the supply chain and is putting pressure on suppliers of mono and polycrystalline silicon, the raw material from which silicon solar PV cells and panels are made.
At the end of the day, Helios Solar Works isn’t shying away from competition. “We’ve invested in a modern manufacturing facility and we want to add capacity and hire people.
The imposition of tariffs on Chinese silicon solar PV imports isn’t stopping the Chinese export express from occurring nor is it preventing China’s biggest solar PV manufacturers to cut back on production. In fact, some are pressing their advantage and announced that they will be boosting production further in 2012.
In its recently announced 12th Five-Year Plan for the economy, China’s Ministry of Industry and Information is mandating that Chinese solar PV manufacturers significantly increase production and produce 5 gigawatts (GW) worth of solar PV modules by 2015 in order to bring their cost down to 0.8 yuan ($0.12) per kilowatt-hour (kWh).
It’s hoped that the Chinese government’s plans to spur domestic demand will take up much of the increased production, but China’s been saying it would do that for years now. Nonetheless, more than 90% of Chinese solar PV is being exported, offering little or no solace for U.S. and other foreign competitors or improving prospects for a growing U.S. solar PV manufacturing base and solar energy industry manufacturing jobs, Clean Technica.com reports.