China denounces U.S. tariffs on solar products
May 31, 2012 Category Alternative energy, Environment
China denounced the United States’ decision to impose additional punitive duties on its solar products, saying America is sending negative signals of trade protectionism to the world. The U.S. Commerce Department said in a preliminary ruling that Chinese exporters had dumped solar cells and modules at margins ranging from 31% to 250%, siding with some American solar companies, including the U.S. unit of Germany’s SolarWorld, that filed the complaints. A final decision on the tariffs will be made in October. Shen Danyang, Spokesman for China’s Ministry of Commerce (MOFCOM), said that the U.S. ruling was unfair and amounted to trade protectionism. The tariffs will hurt both Chinese companies and American users, he added. The move also faces opposition at home, where U.S. critics said the tariffs could slow clean energy development and increase costs for American consumers. The new tariffs would be in addition to the anti-subsidy tariffs of up to 4.73% imposed by the U.S. earlier this year on solar panels from China. Chinese solar makers have denied selling products below market prices, instead suggesting that technology advancement and large-scale production had helped drive down production costs. “These duties do not reflect the reality of a highly-competitive global solar industry,” said Andrew Beebe, Chief Commercial Officer of China’s Suntech Power Holdings Co, which was told to pay 31.22% as antidumping fees. In its investigation, the U.S. used production costs in Thailand, which produced about 0.1 gigawatt (GW) of solar panels last year, as a proxy for costs in China, which manufactured about 15 GW, according to Li Junfeng, President of the Chinese Renewable Energy Industries Association and an official of the National Development and Reform Commission (NDCR), the Shanghai Daily reports.
CLSA’s Charles Yonts said the final duty imposed would be less than 10%, “which would allow [U.S. President Barack] Obama to show that he’s being tough, but not really have any impact and threat of retaliation”. China exported USD3.1 billion of solar cells to the U.S. last year. The U.S. decision to impose import duties on Chinese solar panels will raise their price to USD1.11 per watt, 17% higher than the current spot price of non-Chinese panels, according to calculations by Bloomberg New Energy Finance. China retaliated by saying the U.S. grants subsidies to its renewable energy companies, which are prohibited under World Trade Organization (WTO) rules and can distort normal trade. Chinese solar panel shipments to North America may be cut by 75% this year because of the anti-dumping ruling, according to California-based IHS. The cut in Chinese supplies may reduce North America’s total panel imports by 45%, driving up prices for the modules. The consulting company had estimated Chinese manufacturers would account for 2 GW of imports, a figure it says may now drop by as much as 1.5 GW. “The penalties are likely to add as much as 12% to the cost of solar modules, lowering the average return on investment for solar systems in the region by as much as 2.5%,” said IHS Photovoltaics Analyst Mike Sheppard. Meanwhile, China is developing third generation photovoltaic technology, which may help Chinese PV makers circumvent the tariffs, according to He Zuoxiu, Academician at the Chinese Academy of Sciences (CAS). The third-generation technology combines purified silicon (from solar furnaces), sun-tracking technology, light concentration and integrated high-concentration photovoltaic systems. Pilot projects in Gansu and Inner Mongolia have yielded promising economic results, according to He. The new type of technology is different from the first generation, which is based on crystalline silicon.
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