EU Solar Anti-Dumping Case Great News For The Climate

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This is a repost, first posted on Lenz Blog last September, when the EU anti-dumping investigations started. Now they have led to provisional anti-dumping duties, as Trade Commissioner van Gucht just announced. These start out at 11.8% tomorrow and will be raised massively to an average 47.6% two months later if there is no negotiated settlement in the meantime.

EU China fistThe European Union Commission has initiated an anti-dumping investigation against solar panel imports from China, see their recent press release here.

It will take some time before there are any results. Provisional findings are due in June 2013. They might lead to provisional anti-dumping duties, continuing the investigation without such duties, or termination of the investigation.

With 21 billion euros worth of solar panels exported from China to the EU in 2011, this case is the biggest anti-dumping case ever handled by the Commission.

I have commented on these matters in previous posts, a list of which I will attach at the end.

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First off, the EU is by far the largest market for solar panels, with 75% of new installations in 2011. That in turn means that any impact from these anti-dumping procedures will be much more important for the market than that of the American anti-dumping duties.

If some anti-dumping duties increase the price of solar panels on the EU market from June 2013 on, all things equal, one would expect a reduction of demand in the EU.

That in turn means that the solar panels not sold in the EU because of such a measure would need to be sold somewhere else, increasing supply on all non-EU markets. Which in turn means even lower prices for solar panels in markets that are set for explosive growth anyway (China, Japan, India). That would be great news for the climate.

Those non-EU markets would of course also include Mongolia and the North African and Middle East countries, which are of strategic importance for energy from the desert.

With over 50 GW a year solar panel production capacity around, reduced demand in the most important market would mean a further massive reduction in price on all remaining markets.

On the other hand, it remains to be seen if anti-dumping duties would really reduce demand in the EU.

For the German market, they should be irrelevant if the feed-in tariff system works as it is supposed to.

Under a feed-in tariff system, solar energy gets a tariff for each kWh of electricity produced. Said tariff is calculated from the cost of installing the solar panels.

If those costs go up because of the anti-dumping duty, the feed-in tariff would need to reflect that by going up accordingly. Since the cost of the solar panels as such is only about half of the whole system cost, any such adjustment would probably not be very large.

And one would not expect that feed-in tariffs for solar would actually go up. Rather, the anti-dumping duties would be factored into the next decision on reducing the tariffs. Those reductions would slow down somewhat.

To sum up, it remains to be seen if there is any anti-dumping duty in the first place. If there is, it remains to be seen if that actually reduces demand on the EU market. If there is a reduction in demand, that would be a good thing, since it would mean that solar panels would become even cheaper in the non-EU markets of China and India.

These are the most important markets for the global warming issue. The large EU solar market and especially the German feed-in tariff was vital for bringing the prices down massively. But massive deployment as a consequence of those lower prices in the next couple of decades needs to happen in China and India foremost.

Related posts:

EU solar antidumping case, July 29, 2012

European Photovoltaic Association 2011 market report, January 29, 2012

China dumping case, December 4, 2011

50 GW solar manufacturing capacity, September 15, 2011

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Dr. Karl-Friedrich Lenz

is a professor of German and European Law at Aoyama Gakuin University in Tokyo, blogging since 2003 at Lenz Blog. A free PDF file of his global warming science fiction novel "Great News" is available here.

Dr. Karl-Friedrich Lenz has 67 posts and counting. See all posts by Dr. Karl-Friedrich Lenz