The testimonies coming out of US anti-dumping hearings are heart-rending. The deluge of cheap solar modules began around 2011. The U.S. manufacturing industry went into a downward spiral at the very time that solar power was catching on. More than twenty companies went out of business or had significant layoffs. Thousands of workers are said to have lost their jobs, impacting their families, communities and local businesses. Sharp Solar closed its factory in Memphis; Evergreen filed for bankruptcy; Schott and BP Solar have both disappeared.
Many think of SolarWorld Americas as a German company, but the Oregon company has gone through many changes of ownership since it was founded in the late 1970’s. SolarWorld Americas employed 1,350 people in 2011.
“Now, our workforce has dropped to about seven hundred,” said Mukesh Dulani, President of SolarWorld Americas Inc.
SolarWorld was forced to shut down all production at our Camarillo facility, which had made solar products since the late 1970s.We have now closed even our sales, marketing and other commercial activities there. In Oregon, we also had to lay off workers and curtail production on our 100-acre campus. In August 2013, we were forced to shut down our U.S. production of ingots and wafers, and our state-of-the-art crystal and wafer production equipment now sits idle in our facility. Despite rising demand for solar products, and even after winning the first trade case, we were still forced to dismiss workers and idle facilities. We have suffered huge operating losses and lost market share.
“The solar industry is an anchor of Oregon’s manufacturing base and is a central driver of Oregon’s innovation economy. It supports high skill, high wage jobs that are critical to helping attract investment and new economic opportunities for the 21st century economy,” said Senator Ron Wyden, Chairman of the Senate Finance Committee.
Yet the solar industry has been under siege by its Chinese competitors for the last five years. It isn’t that American solar can’t compete; it is because China isn’t playing by the rules. Chinese solar producers were bankrolled by the Chinese government. So they overproduced and dumped solar panels into the U.S. market at prices that were below the cost of production.
Silicon Energy was just entering the market when the flood of Chinese products started. They produce a high-quality PV solar system used for commercial awnings, carports and other overhead structural solutions. Silicon was suddenly confronted by contractors and distributors whose primary interest was price.
“Last year, we had to lay off our entire floor production team at our Minnesota facility. Most recently, we have been forced to idle our production facility in Washington state,” said Gary Shaver, the President of Silicon Energy.
“These large volumes of subject imports were priced at extremely low levels – they overwhelmed the U.S. market and drove down market prices for solar panels. A price war essentially broke out among manufacturers, distributors and installers. I would and still do receive daily emails from Chinese manufacturers and distributors offering solar modules well below $0.70 cents per watt. As a result, we felt that we had no choice but to give into the enormous price pressure and start buying subject imports ourselves if we were to stay in business,” said Erin Clark, President of PetersenDean’s Solar Division Solar4America.
(His company eventually returned to their vision of supporting American jobs and American manufacturing.)
One of the other installation companies testified,
Many distributors and installers have given into the pricing pressure. They have either left the business or now buy their panels from Chinese and Taiwanese producers. In fact, these installers and developers have business models that, quite simply, depend on the use of dumped and subsidized solar products. They often do not even identify the specific module manufacturer – they wait to get the lowest possible price on the date of installation.
SolarWorld filed a complaint with the US Commerce Department and US International Trade Commission, which imposed a tariff in December 2012.
The Chinese found a loophole. The tariff did not apply to Chinese modules assembled from non-Chinese cells. So the flood of Chinese modules began again, this time using cells manufactured in third countries like Taiwan.
“This year, we are being harmed every day by subject imports, and we are seeing them offer modules for 60 cents per watt and even less. That is one-third of where prices were just three years ago. No one should be forced to compete with these dumped and subsidized price levels,” said Ardes Johnson, Vice President of Sales and Marketing for SolarWorld Americas.
These imports caused module prices in the U.S. market to free fall over the past three years. Such a large drop in prices during a period of strong demand is a direct result of subject producers’ overcapacity and the unfairly priced imports that are directed at the U.S. market. These producers have shown that they will undercut the U.S. industry’s prices, no matter what they are, in order to take market share. Chinese and Taiwanese dumped prices have frequently been so much lower than U.S. market prices that we have simply lost the chance to even participate in sales opportunities.
Some facts that need further exploration:
- Some “Chinese” solar companies are largely owned by US shareholders. How extensive is this? And how does this fit into the picture being described?
- In addition to “cheap” solar modules, some of the highest quality solar modules in the World come out of China.
- Two of the five companies that the Silicon Vally Toxic Coalition recently named as industry leaders, because of their environmental practises and transparency, were Chinese. Trina Solar was #1 and Yingli was #3.
- The call for a negotiated, rather than litigated, settlement
Differing Chinese perspectives of these events appeared in yesterday’s Global Times. Meng Xian’gan, deputy director of the China Renewable Energy Society, said they highlight the “competitiveness and status of Chinese solar products on the world stage.” Former Vice-Minister of Commerce Long Yongtu was critical of the way Chinese solar firms went overseas like a “swarm of wasps,” undercutting prices and provoking anti-dumping probes.
Meng Xian’gan added,”The industry used to rely on economies of scale, leading to overcapacity and price wars. In the future, core competitiveness through technological innovation should be emphasized to make this industry an efficiency-driven one that offers more mid- and high-end products.”
The US Commerce Department is expected to make a final ruling on December 16, 2014.
(Photos through-out this article Images of solar modules being manufactured at SolarWorld)