EU AD duties on Chinese PV imports: A turning point for China?

Share

How will the EU levy affect European manufacturers?

It will give them a temporary relief and there will be a transitional price increase of module prices. In the long term, however, it still remains to be seen how the global market price will develop. To avoid tariffs Chinese manufacturers may outsource part of production temporarily. Also it is still open how price aggressive Korean, Indian and Taiwanese manufacturers will react.

What will be the consequences outside the EU?

With respect to China, the AD import duties means that they will lose market share in the tier 2 and 3 categories In other words, the duty would increase module prices that far, that Chinese modules will no longer be able attractive large-scale projects in the EU. However, in the next four weeks before the provisional anti-dumping levy is imposed, they will try and ship the highest volume of modules possible to Europe. The employees at customs in Europe will probably be working long hours.

What will happen to tier 1 Chinese manufacturers?

Chinese manufacturers will probably outsource their manufacturing to countries with lower productions costs, such as India and Malaysia. In some cases Chinese Tier 1 suppliers will accept duties or share negotiate tariff sharing with customers.

Many German solar companies have filed for bankruptcy in the last months. But at the same time, Germany is China’s biggest export country. Will Germany be against or for an implementation of the AD duties on Chinese solar imports?

This is speculation, but I believe or, better said, I hope that Germany as an EU member state, will accept the EU Commissioner’s recommendations. The solar industry is a dynamic industry that requires quick decisions. Although Germany might not agree with the imposition of these anti-dumping duties on Chinese imports – because it fears that the Chinese will not buy their products in retaliation – it will likely back the EU on this specific trade case.

What will be China's reaction?

Naturally, they will not be happy because they do not like to be told how to do their business. Nonetheless, I believe that China will likely rethink its global business strategy, because they have overcapacity. Somehow they will have to find a way to sell all of the modules they have produced.

What effects will the AD duties have on PV module prices?

The average selling price (ASP) for Chinese crystalline silicon photovoltaic modules will probably increase from March's price of €0.50 to €0.65. This is a significant increase and it remains to be seen if the market will be willing to pay such high prices. This jump in prices will have a stronger impact on large-scale projects.

What will happen to large-scale PV system prices?

They will go up from the current €1.05 to between €1.15 and €1.20. For instance, in Germany the rate of return will be at 5- 6%.

How will the AD duties impact financial investors’ business models for large-scale PV projects?

Even before the AD duties discussion on Chinese solar imports emerged, many financial investors had already prepared to reduce the solar segment in Germany and Europe in general. Feed-in-tariffs are decreasing faster than system price for large-scale ground-mounted solar projects in the EU than a few years ago. This is the case for utility-scale projects without self-consumption. Phoenix Solar, for example, was the first one to realize this and has changed its business focus. I see this trend occurring in other companies as of June or August.

Can this also be applied to private investors with small rooftop PV installations?

No, we don’t expect a severe price rise due to the provisional AD duties. Also we do not see a major change in the business model of small private investors. In our calculation installations of 5kW with 30% of self-consumption, will return 11% per year on invested capital.

This content is protected by copyright and may not be reused. If you want to cooperate with us and would like to reuse some of our content, please contact: editors@pv-magazine.com.

Popular content

Anker launches new all-in-one home storage solution

10 July 2024 Anker has developed a new all-in-one home storage solution with up to 30 kWh of capacity, available in single-phase and three-phase configurations.

Share

Leave a Reply

Please be mindful of our community standards.

Your email address will not be published. Required fields are marked *

By submitting this form you agree to pv magazine using your data for the purposes of publishing your comment.

Your personal data will only be disclosed or otherwise transmitted to third parties for the purposes of spam filtering or if this is necessary for technical maintenance of the website. Any other transfer to third parties will not take place unless this is justified on the basis of applicable data protection regulations or if pv magazine is legally obliged to do so.

You may revoke this consent at any time with effect for the future, in which case your personal data will be deleted immediately. Otherwise, your data will be deleted if pv magazine has processed your request or the purpose of data storage is fulfilled.

Further information on data privacy can be found in our Data Protection Policy.