The U.S. Commerce Departments final determination in the anti-dumping duty (AD) and countervailing duty (CVD) investigations of imports of certain crystalline silicon PV products from China and Taiwan has not exactly surprised many in the solar industry, although its impact is expected to lead to diverse strategic developments for Chinese and Taiwanese players.
pv magazine spoke to Jenny Chase, manager, Solar Insight at Bloomberg New Energy Finance, about the ruling and what effects it may have on Chinese and Taiwanese companies and what it means for U.S. manufacturers.
Chase says the decision is bound to motivate more Chinese producers to move production outside of China.
Jinko and ZNShine already have factories in South Africa, and Jinko also in Portugal, she says, adding that the now merged Hanwha solar group is planning a new factory in Korea while China Sunergy operates one in Turkey.
South Africa and Turkey are obvious choices because they are not high cost and the local market has local content requirements, and the local content argument will also apply to Brazil in future. Mexico is also attractive due to low cost of labor, reasonable industrial base and good trade links with both the U.S. and Latin America.
In addition to the locations mentioned above, Chase says Malaysia is also an attractive destination with its good industrial base and advantages written into the tax law.
With regards to the tariff effects on original equipment manufacturer (OEM) production space, Chase points out that well-established contract manufacturers like Jabil and Flextronics, as well as smaller module factories in third countries, have already benefitted and will probably continue to benefit.
According to Tuesdays decision, Taiwanese PV manufacturer Gintech will be paying nearly the same rate at 27.55% while Motech had its rate reduced by more than two-thirds to 11.45% and all other Taiwanese PV makers have had their anti-dumping rates nearly halved to 19.5%.
Chase says the reductions offer just a slight reprieve for Taiwanese firms, many of which are now focusing on the much more interesting Japanese market.
She adds that Taiwanese producers may just decide to ignore the U.S. As far as I am aware, none are planning extra factories overseas — though some are adding module plants in Taiwan.
As for U.S. manufacturers seeing a possible boost in business due to the tariffs, Chase says not really. Products from third countries are still cheaper.
And despite the much ballyhooed pledges by U.S. and China to cooperate in the fight against global warming, a negotiated settlement between the two countries remains unlikely.
I think despite the rhetoric around the U.S.-China climate deal, a negotiated settlement is as far away as ever. It's not in the interests of the U.S. industry, and the Chinese firms I have spoken to are not very keen on the options on the table either. Meanwhile solar project developers have got used to paying $0.68-$0.71 for modules — either Chinese including the 2012 tariffs or from other countries — and have more important things to lobby for.
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