JA Solar latest Chinese firm to withdraw from EU price undertaking

JA Solar has followed in the footsteps of a handful of other leading Tier 1 Chinese solar companies in voluntarily withdrawing from the European Union’s (EU) minimum import price (MIP) undertaking.

In a decision taken today, the company said that it will continue to supply the European solar markets via its manufacturing facilities located outside of its domestic location of China. The company has a 400 MW solar cell fab in Malaysia and recently announced plans to develop a 300 MW module line in Brazil.

According to JA Solar, the current MIP – which was introduced in 2013 as a means for the EU to impose some level of pricing control over the influx, or ‘dumping’ of solar modules in the EU by Chinese firms – is no longer fit for purpose, with average selling prices (ASPs) of solar modules now below agreed MIP levels.

JA solar said that it can remain competitive in the EU only by withdrawing from the price undertaking.

"We are committed to fair trade and market competition, as reflected by our prior participation in, and compliance with, the terms of the price undertaking," said JA Solar chairman and CEO Baofang Jin. "However, we strongly believe that the current MIP does not reflect recent price trends in the market. Selling prices continue to decline, while the MIP has remained unchanged for the past 18 months."

Facing anti-dumping tariffs of 51.5% and anti-subsidy duties of 5% on its imports, JA Solar joined the MIP in December 2013 willingly, viewing the EU as a vital market for its expansion plans. However, as a global glut of solar modules has dragged down prices to record lows, those duties are now more attractive to JA Solar than operating within the agreed price undertaking.

"The current MIP adversely impacts our ability to execute our business strategy, and hinders the growth of the European solar industry," said Jin. "As a result, we believe that withdrawing from the price undertaking agreement is our only choice to be competitive and further our goal of providing clean energy to the EU. We believe this step will be beneficial to EU power producers, consumers, and the environment."

Earlier this month JinkoSolar took the same step, stating that its operations in Europe were being unfairly hampered by the MIP agreement.

Proponents within the EU in favor of maintaining the duties are led largely by EU ProSun, which recently blamed the actions of Chinese companies in triggering large job losses at, specifically, SolarWorld. The lobbying body believes that the EU is facing a new wave of Chinese dumping, and has called on the EU to act urgently to "enforce its anti-dumping and circumvention rules because Chinese manufacturers are fudging and cheating [them]."

SolarPower Europe, on the other hand, leads a consortium of at least 34 European solar and renewable energy organizations that are for the scrapping of all trade barriers against Chinese solar firms – arguing that the tariffs and MIP have actually done more to harm solar installations in Europe, leading to around 100,000 downstream job losses.