Quite predictably, the U.S. Department of Commerce today announced that it has found that the Chinese government has awarded its solar companies subsidies that are too strong for international trade rules. However, they were essentially found to be much less in violation of trade rules than expected. Imported solar cells and solar panels from China will get hit with tariffs ranging from 2.9% to 4.37%, not nearly as large as many solar companies and analysts were predicting.
Investors actually starting pouring money back into leading Chinese solar companies after the announcement, since they had assumed the tariffs would be higher. Shares in some companies rose as much as 14%.
“Today’s preliminary determination by the Department of Commerce imposing low tariffs on imported solar cells and modules is a relatively positive outcome for the U.S. solar industry and its 100,000 employees,” said the leading opponent to the trade case, president of Coalition for Affordable Solar Energy Jigar Shah. “However, tariffs large or small will hurt American jobs and prolong our world’s reliance on fossil fuels. Fortunately, this decision will not significantly raise solar prices in the United States….”
If you’ve missed the whole back-story, a coalition of solar panel manufacturers led by SolarWorld filed the trade complaint, but a large number of U.S. solar installers and developers (led by Jigar Shah) were opposed to this challenge, since they feared it would raise the price of solar panels, which have dropped a ton in the past year.
The low tariffs find China guilty, of over-subsidizing its solar goods, but much less guilty than most presumed.
Note that the investigation isn’t complete and this is only a preliminary ruling.
Additionally, the Department of Commerce still needs to issue a ruling on a perhaps more serious matter of whether or not China was dumping solar products in the U.S. If found guilty of dumping, it can be expected that higher anti-dumping duties will be implemented.
Solar Energy Industries Association (SEIA) Weighs In
SEIA has largely stayed out of discussions about the trade dispute. Logical, given that it represents installers, developers, AND manufacturers. It’s statement today stayed neutral about the decision, but unveiled some proactive efforts to tackle international trade issues. Here’s most of its statement:
The Solar Energy Industries Association (SEIA) today announced a new initiative to facilitate global and regional dialogues on trade and competitiveness and the role of government in encouraging development of the global solar energy industry.
Over the past year, SEIA has held a series of dialogues with several leading national solar trade associations regarding potential collaboration on and resolution of trade issues before they result in action before trade remedy bodies. SEIA is also collaborating with the Chinese Renewable Energy Industries Association (CREIA) and other Asia-Pacific based trade associations on the development of a formal Solar Dialogue within the Asia-Pacific Economic Cooperation (APEC).
The initial goals of these dialogues are to:
- Promote WTO-acceptable trade in solar energy goods, while taking into account the unique and important role of governments in the development of the solar energy industry;
- Ensure that global innovation, scaling, and economic development occur; and
- Create a collaborative framework for preventing trade conflict in the solar industry and resolving it constructively if conflict does arise.
The announcement came as the Department of Commerce (DOC) ruled to impose countervailing duties on the import of Chinese PV modules into the U.S. market.
“SEIA is supportive of a rules-based process for resolving trade disputes in the solar industry and the Department of Commerce’s investigation is certainly part of that process,” said Rhone Resch, president and CEO of SEIA. “It is important to note that this is a preliminary determination and the antidumping decision will be rendered in May. If the tariffs remain at these levels, we do not think that this will have a material impact on the U.S. market.”
Resch added, “But the trade action against Chinese imports is indicative of a growing trend of trade conflict in the global solar energy industry that threatens to curtail the rapid growth we have seen in this market – both in the U.S. and abroad. Governments and industry must recognize that while trade remedy proceedings such as antidumping and countervailing duty investigations are an important part of the global trade rules, so too are collaboration and negotiations. This is why SEIA is taking a proactive lead to create a dialogue with several leading national solar trade associations and governments from around the world.”
Solar panels & money image by shutterstock