Over the past few months the voluntary withdrawal of leading Tier-1 Chinese solar PV companies from the European Union’s (EU) minimum import price (MIP) undertaking gathered pace, and today the European Commission has confirmed in its official journal that the request for removal by five well-known names has been granted.
As expected, JinkoSolar, JA Solar, Wuxi Suntech, Risen Energy and Phono Solar are now operating outside of the MIP agreement, and will be subject to pre-assigned anti-dumping and countervailing tariffs on all solar components imported into the EU.
The decision taken by almost all of China’s largest solar module manufacturers to remove themselves from the MIP is a stark reflection on the unwieldy nature of the undertaking, which has been criticized across Europe for its inflexibility in taking into account the price fluctuations inherent in the solar industry.
Today, with solar module prices at record lows, Chinese suppliers have calculated that they can serve their European markets more cost-effectively outside of the MIP’s scope, preferring instead to either incur the AD and CVD tariffs levied by the EU, or supply Europe with modules and components produced at manufacturing facilities located in Southeast Asia. These locations are currently outside of the scope of EU regulations.
The rate of duties required of each solar company varies, with JA Solar for example willing to pay 51.5% AD and 5% anti-subsidy duties on its solar imports, rather than abide by MIP rules. For JinkoSolar, it is facing AD of 41.2% and anti-subsidy duties of 6.5%, while Suntech was slapped with an AD tariff of 48.6% when the duties were first introduced.
Other big names to have extricated themselves from the MIP undertaking include Trina Solar and GCL-SI, while Canadian Solar and ReneSola were removed by the European Commission for alleged breaches of the terms of the agreement.
Following GCL-SI’s withdrawal in October, SolarPower Europe CEO James Watson told pv magazine that the MIP is now all but obsolete. "It was a compromise that has not survived the test of time," said Watson. "The MIP has not been able to keep up with the evolution in price development – largely because it requires companies to submit to prices to a third party for indexation."
Very few companies have been willing to do this, Watson added. "Thus, the price of 56 euro cents/watt the MIP reflects today can be as much as 20 euro cents/watt higher than some quoted on the European market. We have seen European producers quote under 40 euro cents/watt in recent weeks.
"Massive expansion of plants around Asia and the world also make the MIP irrelevant. Thus the only way forward now is to scrap the MIP and the accompanying trade duties and return solar to market prices in Europe."
There are growing calls within Europe to remove solar tariffs against Chinese firms, but in the U.S. there are fears that more barriers could be erected following the election of Donald Trump as president.
Trump has repeatedly stated his desire to impose further trade barriers against Chinese firm, and in a recent earnings call by German inverter specialist SMA, the company calculated that next year could well see a 45% add-on sales tax levied on all Chinese consumer electronic goods entering the U.S. – which could have an impact on inverter and module suppliers.
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: firstname.lastname@example.org.