Europe to face shortage of solar modules following Chinese withdrawal

Solar business

Greentech Lead Asia: The impending EU ruling on anti-dumping duties on Chinese solar products is preventing several Chinese solar makers from supplying to the region.

On March 5, the European Commission (EC) began registration of solar products imported into the EU from China in anticipation of possible anti-dumping and countervailing duties. Importers of solar power modules, solar cells and solar wafers may pay duties on such registered products if retroactive measures are imposed.

In response to this, many Chinese suppliers declined to take direct orders as they fear they will be liable to pay the duty if it is implemented retroactive. This has resulted in a sudden shortage of module supplies in the region.

The solar industry in China, which was deeply affected by a similar anti-dumping duty from the U.S last year, is wary of the consequences the new EU ruling would bring to them. Reportedly Chinese solar makers expressed their fear about EU going ahead with the import duties at the recently concluded Ecobuild exhibition in London.

EU accounts for 74 percent of all newly connected capacity globally in 2011. In 2011 EU had 51.4 GW installed capacity, up 98 percent from 2010. In 2011, Italy topped in terms of solar installation with 9.3 GW connected, followed by Germany (7.5 GW). In 2012 Germany installed 32,389 MW while Italy installed 16,987 MW. EuroObserver expects the total installation in the region will reach at least 120 GW in 2020.

According to ProSun.org, Chinese goods now account for 80 percent of the photovoltaic products sold within the EU. European manufacturers are holding less than 15 percent of the domestic market. Unlike Chinese companies, European manufacturers do not receive any benefits from the government.

Commenting on the present scenario of the solar market in Europe, Milan Nitzschke, president of EU ProSun, said, “China’s daily violations of international trade law destroy thousands of manufacturing jobs in Europe. Tolerating this situation will allow China to create a monopoly in the solar industry, leading to disastrous effect on the European solar industry, including suppliers, equipment manufacturers and thousands of installers. This is because monopolies lead to higher, not lower, prices.”

In 2012, over 25 European companies including Solar Millenium, Centrotherm, Solarwatt Solon, Solarhybrid, and Q-Cells have filed for insolvency. BP Solar shut down European business in 2011 while Schuco International quit business in 2012. Schott Solar, and many others, partially shut down their business or stopped production in 2012. First Solar announced job cuts – around 1350 jobs—in Europe. In 2012, three European solar companies—Sunways AG, Scheuten Solar Netherlands, and Sollbro were acquired by Chinese investors.

European Commission has been investigating Chinese manufacturers since September 2012, and will make a preliminary decision on anti-dumping in early June. If anti-dumping tariffs are imposed, they can be collected 90 days retroactively, therefore from March 2013, EU ProSun said.

Chinese manufacturers argued anti-dumping duties will have an impact on EU economy as it will reduce jobs and result in solar price increase. However, the EU solar industry argues that solar industry in the U.S responded well to a similar anti-dumping policy as it did not show any reduction in jobs and installed capacity.

European solar industry is hopeful as it believes the anti-dumping duty will help the industry grow like in the U.S. Following the implementation of anti-dumping duties on Chinese products last year, Chinese imports decreased drastically from March 2012. Nonetheless, the US solar market grew in 2012, with the number of new installations increasing substantially and average prices for consumers falling in line with technical progress.

editor@greentechlead.com