IMPACTS OF THE SOLAR PANEL TRADE WAR

Report Suggests Tariffs Could Cause Suspension Of Solar Shipments

31 May 2012 (Solary Industry)

“U.S. government anti-dumping penalties on imports of photovoltaic cells from China could suspend nearly half of solar module shipments to North America this year, affecting pricing, inventories and project timelines, according to an IHS iSuppli PV Perspectives report…

“On May 17, the U.S. Department of Commerce (DOC) announced a preliminary determination in its anti-dumping investigation of imports of crystalline silicon photovoltaic cells from China…[Before it] IHS estimated that 2 GW of solar modules shipped into North America in 2012 [as much as 60% of the market] would be imported from Chinese manufacturers…”

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“…Given the high tariffs proposed by the DOC, however, many Chinese players will suspend shipments to North America while they modify their business plans to account for the tariff. This could represent the temporary removal of up to 1.5 GW of shipments to the region - accounting for 45% of the total market in 2012…[T]he penalties are likely to add as much as 12 percent to the cost of solar modules, lowering the average return on investment for solar systems in the region by as much as 2.5 percent…

“…Suntech Power and Trina Solar…[are] subject to unique tariff rates of 31.22% and 31.14%, respectively. All other companies singled out in the investigation received an average duty of 31.2%...Chinese companies not singled out in the investigation will receive an even larger 250% duty… to deter Chinese companies from forming new joint-venture companies with existing firms that are not on the list…[H]owever, modules, laminates and panels produced in the PRC from cells produced in a third country are not covered by this investigation…[so] many Chinese cell manufacturers will be incentivized to outsource to third-party companies in other countries in order to get around the duties…A popular option will be to utilize cell specialists operating in Taiwan…[though that] will add 10 percent to 12 percent additional cost…As a result, the return on investment (ROI) for solar installations is expected to only decline by 1.5% to 2.5%...”

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