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U.S. Solar Group Says Analysis Confirms China’s ‘Battering’ of Industry

Monday, January 30, 2012

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A solar photovoltaics industry group is citing a market analysis of the industry as evidence that China is heavily subsidizing the development of solar-manufacturing capacity and using low-priced exports to topple the U.S. solar-manufacturing sector.

 SolarWorld Industries America Inc.

 SolarWorld Industries America Inc.

The Coalition for American Solar Manufacturing says China’s subsidies of solar-manufacturing capacity and low-priced exports are “battering” the U.S. industry. Shown here is rooftop solar installation at the Orange County Convention Center in Orlando, Fla., reported to be the largest solar installation in the Southeast. The panels were supplied by SolarWorld Industries America LP, based in Hillsboro, Ore.

The Coalition for American Solar Manufacturing (CASM), saying it has the backing of more than 150 U.S. employers that provide jobs for more than 11,000 workers, asserts that an analysis by Hari Chandra Polavarapu, managing director of solar and clean-technology research for brokerage firm Auriga USA, “underscores the importance of holding China accountable to international trade law.”

CASM says the analysis brings into sharp focus China’s alleged campaign of underwriting development of massive solar manufacturing capacity—without cultivating a significant domestic market—then “wielding exports of artificially low-priced product as a ‘battering ram’ to knock down the U.S. solar-manufacturing industry.”

‘Predatory Capitalism’ Alleged

CASM said Polavarapu, a solar-focused analyst since mid-2004 with Deutsche Bank and now Auriga, contends in a series of research and analysis notes that China’s alleged actions against foreign domestic industries “not only distort markets but also sap the power of competition to drive efficiency and innovation.” Polavarapu characterizes China as a “state sponsor of predatory capitalism and asymmetric warfare” that “does not help in weeding out inefficient players but poisons the profit pool for everyone.”

SolarWorld

“The lower prices of solar cells and modules from China so far have served as a battering ram in destroying overseas solar PV manufacturing competition,” Polavarapu wrote in a Dec. 22 analysis. “If these unfair/irrational practices that led to lower prices continue unhindered, how long will it be before the downstream solar PV value chain is also fully emasculated?”

“The point is a trade/industry policy cannot be sustained with free market capitalism at one end of the table while retaining totalitarian control to engage in economic warfare from the other side,” he wrote in a Jan. 11 analysis. “Individual industries and companies can compete against each other but cannot compete against a sovereign which has currency, capital, taxation and policy levers at its disposal.”

Decision Awaited on Anti-Dumping Petitions

CASM, founded by seven domestic crystalline silicon solar technology producers led by SolarWorld—the largest U.S. producer for more than 35 years—filed anti-dumping and anti-subsidy trade petitions in October 2011 against Chinese solar manufacturers to halt what the petitions characterize as “pervasive, systemic use of state support to injure the U.S. industry.” At least 12 domestic producers have announced layoffs, gone bankrupt or closed plants in all regions of the country over the past two years.

On Dec. 2, the U.S. International Trade Commission unanimously issued a preliminary ruling that Chinese trade practices are harming the U.S. domestic solar industry. CASM said the next step will be the Commerce Department’s preliminary determination on whether to impose import duties to offset the effects of allegedly illegal Chinese subsidies.

CASM said Commerce also will rule on whether Chinese importers have mounted an evasive surge in Chinese imports; if so, importers of record would have to post bonds or cash deposits on tariffs on imports back 90 days. The department on March 27 is scheduled to determine whether tariffs are warranted to offset the effects of alleged Chinese import pricing at artificially low prices.

In a news announcement issued Jan. 25, CASM said Chinese producers have more than doubled imports of crystalline silicon solar cells and modules in advance of potential U.S. government duties on those imports, according to an evaluation of U.S. Customs and Border Protection data. CASM sauys a recent 110% surge in import volume since July 2011 is further proof of illegal dumping and subsidies by Chinese solar producers, and warrants a finding of critical circumstances that would apply retroactive duties to Chinese imports.

Revival of Domestic Industry at Stake?

CASM said it seeks to restore legal international competition as a step toward rekindling growth of U.S. renewable-energy manufacturing and jobs. In the Jan. 11 analysis,

Polavarapu wrote, “A valid defense from the U.S. on an issue that has a vital bearing at many levels of its society is not a protectionist trade war, but a message that free trade does not mean trade that is free of rules.”

He added “Today, it is solar panels; tomorrow, it will be about downstream installations, and beyond that it can be anything else.”

The Coalition for American Solar Manufacturing is made up of seven companies that manufacture solar cells and modules in the U.S., as well as more than 150 employers of more than 11,000 workers who have registered their support for CASM’s case as associate members.

More information about CASM: www.americansolarmanufacturing.org.

   

Tagged categories: Coalition for American Solar Manufacturing; Economy; Energy efficiency; Market; Photovoltaic coatings; Solar energy

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