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European Union Removes Trade Sanctions On Chinese Solar Modules

By Frank Andorka, Senior Correspondent

While the United States seems hellbent on starting new trade wars with countries around the world, the European Union (EU) has determined that its own sanctions on Chinese solar modules should come to an end, according to reporting by Reuters.

As Reuters reports:

The EU first imposed anti-dumping and anti-subsidy measures for Chinese solar panels, wafers and cells in 2013 and extended them by 18 months in March 2017, signaling that they should then end.

Chinese manufacturers have been allowed to sell solar products in Europe free of duties if they do so at or above a progressively declining minimum price. If sold for less than that price, they are subject to duties of up to 64.9 percent.

The trade measures will be allowed to expire on Monday.

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The reasons for the expiration mirror the same debate going on over tariffs in the United States, to wit: the EU is trying to strike a balance between EU module manufacturers (who believe the measures should stay in place) and installers (who want the measures to go away so less expensive modules can keep coming to the market and allowing installations to flourish). In the end, the European Commission, which coordinates economic policy for the EU, decided to let the measures expire.

Which, of course, set off a panic in some quarters surrounding what was referred to as a ‘flood’ of modules being dumped on European markets at below-market prices, thereby depressing prices on modules throughout the supply chain. Again from Reuters:

EU ProSun, the grouping of EU producers that launched the initial complaint in 2012 and wanted a further extension of measures, had said that European manufacturers would be devastated if the measures ended.

Beijing’s decision to limit installations in China meant producers there had some 30 gigawatts of excess capacity to shift with few markets to sell into after tariffs imposed by the United States and planned by India, the second and third largest markets behind China. The total EU market is some 7 gigawatts.

It’s long been our contention that tariffs don’t really help anyone, and that inexpensive modules help spread the use of solar throughout the world. It’s why we’ve argued so vociferously against Trump’s tariffs here in the United States.

But this European issue isn’t over yet – Reuters reports ProSun said it might launch a legal challenge to the expiration of the duties. This story is something to keep an eye on moving forward – it could reshape the global solar industry for years to come.

More:

EU ends trade controls on Chinese solar panels raising fears of cheap imports

Chinese Solar Market Suffers Severe Setback As Government Slashes Subsidies, Projects

China This is one of those times having a red flag waving in the wind is an unfortunate visual.

By Frank Andorka, Senior Correspondent

The South China Morning Post reports a Chinese solar market in freefall after the government decided it would no longer fund new solar farms and slashed subsidies to solar electricity users by almost 10%.

According to the paper, the government says the move is designed to wean the Chinese solar market off of government subsidies and put it on a more “sustainable path.” The Post wrote:

A joint statement put out on Friday by the National Development and Reform Commission, Ministry of Finance and National Energy Administration said, “The measures are aimed at “promoting the solar energy sector’s sustainable development, enhancing its development quality and speeding up reduction of subsidies.”

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One observer of the U.S. markets wondered allowed if the U.S. market was ready for the onslaught of inexpensive panels that could flood the market as these Chinese manufacturers who are used to certain profit levels based on subsidies look to dump excess inventory into one of the world’s expanding solar markets.

“Watch the price dumping now,” the observer said, speaking on anonymity to discuss trade policy freely. “They are going to deluge modules to the U.S. market and get us addicted to low-cost modules even more.”

Roth Capital Partners put out a warning to its investors, downgrading its advice on all Chinese-related solar stocks.

“Our initial estimates suggest we are due for a potential massive 20 to 30 GW of annualized overcapacity in the coming months and quarters without a clear catalyst of rebalance,” Roth’s email said. “We expect to see a rapid deterioration in (average solar prices) through the entire supply chain – module all the way to poly silicon – while downstream players will benefit”

What is unclear at this time is the effect that President Donald J. Trump’s 30% tariffs, imposed in January, will be able to stop – or even slow – the onslaught into the U.S. market. Depending on how little the Chinese companies are willing to charge for the modules, they could in effect decide to work the 30% tariff into their prices. Though such dumping would be good in the short run for project developers in the United States, it would devastate what little module manufacturing is left here.