US industry sees EU-China settlement in mixed light

Reaction in the United States to the recent EU-China solar trade conflict resolution is ranging from dissatisfaction, with what is perceived to be restrained sanctions on Chinese exporters, to satisfaction that both parties in the deal were willing to negotiate a mutual agreement.

The focus of the ongoing U.S.-China solar conflict has moved from Chinese cells to U.S. polysilicon, and hopes are for a final settlement of the dispute on the heels of the EU resolution.

In the meantime, there has already been a marked upstream impact from the ongoing U.S.-China dispute on the U.S. polysilicon industry, and there also is concern that Chinese panel exporters, now blocked from the sale of cheaper products in Europe, will focus more intensely on the U.S. market.

"We don’t believe that the U.S. solution (the U.S. Commerce Department’s anti-dumping and countervailing duties) to the problem addresses the situation here; it has been helpful, but the solution is not adequate,” says Ben Santarris, the U.S. spokesman for SolarWorld, based in Hillsboro, Oregon. While the duties may have relieved some financial pressure on SolarWorld, the company has laid off 350 employees over the last 18 months.

More positive reaction to the EU-China solar settlement came from John Smirnow, the Solar Energy Industry Association’s (SEIA) vice president of trade and competitiveness, in Washington, D.C: "The positive aspect of the EU-China settlement is that it was a negotiated settlement, an important signal for the ongoing U.S.-China dialog. Since our conflict began, this is the best opportunity we’ve seen to find a resolution, so we are now working to resolve the conflict," he says. Nonetheless, "The Commerce orders are not really benefiting U.S. solar consumers or U.S. cell makers, but it is helping third-country cell manufacturers," says Smirnow.

In October 2012, the Commerce Department announced final additive anti-dumping and countervailing duties for crystalline-silicon PV cells from China, whether or not they are incorporated into panels. The anti-dumping rates range from 7.78% to 21.19% for Chinese company respondents that participated in the investigation and 239.42% for non-participants. Added to these are the countervailing duty rates, which apply from 14.78% to 15.97%. The duties are permanent until lifted.

No jobs have been lost as a result of the duties, says Smirnow. But harsh international competition would have led to further U.S. solar cell and panel-maker bankruptcies; some 8,200 manufacturing jobs were lost in 2012. Since the application of cell duties, China’s counter-strike against U.S.-made polysilicon has most squarely hit the Hemlock Semiconductor Group, of Hemlock, Michigan, which as recently as May laid off more employees; the count is now 150 employees in Michigan and 300 in Tennessee, where it froze construction of its new plant; overall planned capacity upgrades would have been worth an estimated $3.2 billion. China has set a duty on imports of U.S. polysilicon from Hemlock at over 53%; other manufacturer’s duties go up to 57%.

The downstream impact of the EU-China settlement is less tangible thus far. Still, a surge in new U.S. solar panel installations has taken place since the U.S. market price for panels — now largely coming from Taiwan — has only risen about 10% from the low established by Chinese imports prior to the Commerce Department duties, according to Dan Ries, an analyst at Maxim Group in New York. So if Chinese imports drove down the cost of panels available in the United States by 60% before the duties, there has still been a net price drop of 50%.

PricewaterhouseCoopers also notes that despite the warnings of potential U.S. job losses (up to 60,000) in the downstream sector that might result from the Commerce Department duties, the losses did not occur; instead solar demand continues to increase and drive job growth. The Solar Foundation’s Solar Job Census 2012, in November, indicated that "there are more than 119,000 solar workers in the U.S., a 13.2% increase over employment totals in 2011." The foundation also noted that, "According to our census, 31% of employers indicated that component price declines were the greatest driver of company growth." And SEIA reported that in the U.S. market, "723 MW of photovoltaic capacity were installed in the first quarter of 2013, which represents a 33% increase in deployment levels over first-quarter 2012."

Read more about the impact of the EU-China agreement in the upcoming September issue of pv magazine global edition.