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SolarWorld Files Complaint Against Chinese Panelmakers and Cell Manufacturers

DALLAS – A coalition of seven U.S.-based solar panel manufacturers filed a complaint Wednesday alleging unfair trade practices, setting off an investigation that could thrust the solar industry in the middle of a U.S.-China trade dispute.

By filing their petition, the companies are claiming that they are unable to compete in the lucrative and quickly expanding American solar market because, they say, they are being undercut by Chinese crystalline silicon panel and cell manufacturers that are dumping their product at artificially low prices. They also contend that panelmakers and cell manufacturers are receiving unfair subsidies from their government. A finding on behalf of the American companies would lead to tariffs being imposed on solar panels imported from China, possibly as soon as next spring.

The American division of SolarWorld, which employs more than 1,000 workers at its Oregon headquarters and manufacturing facility, is the only company named in the trade complaint. The other six remain anonymous, which is allowed by the Department of Commerce. The group on Wednesday launched the Coalition for American Solar Manufacturing.

There was also an growing indication Thursday that German parent company SolarWorld may also be taking steps to file a complaint in Europe.

Trade complaints are not uncommon. However, according to industry sources, the sheer level of inventory and dollars at stake, and the vast potential of a future market, could make this among the most divisive trade complaints filed in recent years.

In response to the news, Rhone Resch president and CEO of the Solar Energy Industries Association (SEIA) said that his organization "will continue to support open markets based on free and fair trade principles." SEIA believes that is is crucial for governments and private organizations, however, to "operate within the framework of internationally-negotiated trade rules. 

“If it appears that trade obligations are not being met, solar companies – whether foreign or domestic — have the right to request an investigation into alleged unfair trade practices. These allegations must be thoroughly examined and, if unlawful trade practices are found, action to remedy those practices should be taken," he added.

Politically, some Republican presidential candidates and Congressional lawmakers on both sides of the aisle have indicated support for a more hardline stance against China over issues ranging from manufacturing to perceived currency manipulation. Sen. Ron Wyden, D-Ore., has been among the most vocal critics of the price of solar panels coming into the American market. He recently wrote President Obama a letter saying the administration should impose a heavy tariff on panels coming in from China.

The International Trade Commission has 45 days to issue its preliminary determination, while the Department of Commerce has 180 days for the preliminary determination. At this point, tariffs could be set. The cases generally take 15 months for final determination. While much is conjecture at this point, early indications are that the tariff rate sought by the companies filing the claim are at 100 percent.

A ruling at the higher level could effectively shut out competition from the Chinese market. It also opens up the possibility that China could retaliate against U.S.-based manufacturers that depend on Chinese panelmakers and cell manufacturers, such as the polysilicon industry.

According to a recent report released by SEIA, the U.S. was a net solar exporter to China in 2010, so such a move could strain or potentially jeopardize many of the relationships between American and Chinese companies.

The petition was filed jointly with the Department of Commerce (DOC) and the United States International Trade Commission (ITC). According to sources, it is likely that the DOC and the ITC acted in an advisory role regarding the law and the process prior to the claim being filed. Both organizations now will shift to a fact-finding mode.

The ITC must make its preliminary determination based on three measures of injury:

• Whether the volume of imports is significant
• Whether the prices of those imports represents underselling, depresses prices or prevents price increases
• Whether the imports have a negative impact on domestic producers and production.

Following the ITC determination, the DOC has up to six months to implement preliminary dumping duties. Panels could be sold in the U.S. during that six-month window, but any indication that products were being pushed through to avoid pending tariffs would make many of those transactions subject to penalty.

Chinese panelmakers and/or cell manufacturers could file for an appeal through the World Trade Organization, which could work to find a resolution.

INDUSTRY REACTION

Barry Cinnamon,  CEO, Westinghouse Solar

“My opinion is really calibrated on what we in the United States need to do for jobs. The Republicans have a jobs program, Democrats have a jobs program. And we in solar, we should have a jobs program of getting people to work by manufacturing and installing solar. If we can create more jobs installing relatively inexpensive solar panels, and free trade is what supports that, then I think that’s the right thing to do.”

Lisa Frantzis, Navigant Consulting

“The Chinese suppliers have certainly gained a tremendous market share globally. They’ve gone from 3 percent market share in 1997 to 54 percent maker share in 2011. Most of that has been in the last three or four years. The U.S. has gone from about 47 percent to 6 percent in that same time frame. If you look at some of the major module suppliers – Yingli, Trina, Suntech – in Q3, their modules are selling at about $1.30 a watt peak, and we’re hearing prices even lower here today, which will make it very hard for U.S. players to compete in the U.S. market.”

Adam Browning, Vote Solar

“Countries around the world offer incentives in order to attract and build manufacturing sectors. Germany has long offered 50 percent unsecured loans. Malaysia will give you a 10-year tax holiday if you site a manufacturing plant there. In fact, this is what we often ask the U.S. government to do. The key all along has been about reducing costs. China has identified solar as a strategic industry of national importance and the result is they’ve brought down costs tremendously. That is to the benefit of the sector globally. It results in much lower costs in installations and growth in the installation sector. At this point, I’d say a trade war is not of benefit to the American solar industry, the global solar industry and consumers in general.”

Lou Schwartz, Analyst

It certainly shouldn’t be a surprise that U.S. solar panel manufacturers are pursuing anti-dumping and anti-subsidy actions against their Chinese competitors; warnings began circulating in the Chinese renewable energy press months ago that this likely would be one consequence of “cabbage pricing” by Chinese solar exporters.  Given the inability of the Chinese to reign in runaway growth in solar capacity development, shrinkage in China’s most significant solar market largely as a result of the European Financial Crisis, growing discontent over high profile bankruptcies, such as Solyndra, amid a prolonged economic stupor in the U.S. and the failure of the Chinese government to more energetically put in place policies directing a greater percentage of this largely export-oriented industry to domestic markets, it all seems rather inevitable.  

Though avoidable, “it is what it is”, so we now must address the fallout, which will include more trade friction, an increase in subtle Chinese retaliatory actions, the acceleration of the shake-out in the Chinese solar industry, price increases in the U.S. as a consequence of reduced imports from China, a slowdown in the growth of U.S. solar installations and a delay in achieving the goal of grid parity.

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Philippines ups internal security - ₱ 10 Billion Release by the DBM

After the ambushed of MILF militants that killed dozens of Soldier in Sulu Area, and NPA rebels attack to the Mining Camp Southern Philippines, the DBM ordered by the president to release the Armed Forces Modernization budget allocated for 2010 and 2011.

President Benigno Aquino III endowed the Armed Forces of the Philippines (AFP) ₱510 billion to become more effective in maintaining peace and order in the country.

In a press statement issued on Monday, October 24, Aquino ordered the Department of Budget and Management (DBM) to release P10 billion for the AFP Modernization Program which will be used to acquire equipment and to finance capacity-building activities such as training.

"The President is committed to bringing all armed conflicts in the country to a permanent and peaceful end. One way to achieve this is upgrades for our soldiers, who are a key factor in achieving peace," DBM Secretary Florencio Abad said.

He added that special allotment release orders charged against the 2010 and 2011 appropriations of ₱5 billion each are now being prepared.

According to the budget secretary, the AFP will use the 2010 ₱5 Billion funds to equip the Armed Forces of the Philippines (AFP) for the Philippines Army, Navy and Airforce.

For the Philippines' Army the budget released is ₱1.4 Billion to procure the following:

·         14 armored personnel carriers

·        272 20W-Manpack radios

·        3,480 units of force protection equipment

The Philippine's Navy will also procure a strategic sealift vessel that costs ₱2 Billion.

For the Philippine Air Force, the government released the budget of ₱1.6 Billion to procure the following;

·        Special mission Aircrafts

·        2 light lift Aircrafts                             

As for the 2011 ₱5 Billion budget, the AFP will purchase vehicles for civil military operations, health services and disaster response activities. These vehicles will include Philippine Army's 32 five-ton dump trucks and 55 special-purpose vehicles, and Philippine Air Force's two search-and-rescue helicopters, 30 special purpose vehicles and 15 amphibian vehicles.

The AFP will also use the 2011 budget to purchase weapons and communications equipment such as 1,376 handheld radios, 210 AV configuration radios, 100 base radios, and 150 mortars (60 mm) for the Philippine Army, as well as 78 units of audio-video equipment, 160 portable radio receivers, 100 sniper rifle systems, and 2,000 standard weapons systems for the Philippine Air Force.

To ensure integrity in the use of funds, Abad said the AFP has been required to submit a comprehensive report on the implementation status of the AFP

Modernization Program.

"We are ensuring that each and every peso spent by the AFP will directly result in better equipment and other operational support for our men-and-women in uniform," he said.

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