Taiwan starts investigation on PVInsights and EnergyTrend for lowering prices

Editor's note: This article was updated on Jan. 19, 2022, with the conclusions from the Fair Trade Commission (FTC) Taiwan which were released on Aug. 28, 2019. Scroll to the end for the update.

The EU Commission is set to replace Bloomberg’s index with that of Taiwanese market research company PVInsights to establish the minimum import prices of crystalline solar products imported from China, as stated by the commission in a recently published report on the interim review it is conducting and which is expected to investigate the gradual mitigation of the measures against Chinese solar imports. However, doubts are appearing about PVInsights’ index and its ability to reflect true costs, pv magazine has learned.

Taiwan's PV association TPVIA, in fact, has filed a complaint against PVInsights and another Taiwanese market research company, Energy Trend, on behalf of Taiwan’s solar cell manufacturers a few weeks ago at the local Fair Trade Commission (FTC), as confirmed by several sources. The allegations are that the prices which are published weekly by two companies for solar cells and solar modules are too low. The FTC opened an investigation procedure in June, according to a document seen by pv magazine. The investigation relates to possible violations of Articles 25, 26 and 42 of Taiwan’s free trade act.

Their weekly publication on the development of crystalline solar cells showed prices below the real market level, according to representatives of the Taiwanese solar industry. This has a direct negative impact on the solar cell manufacturers in Taiwan and their opportunities for fair trade. The prices published by PVInsights and Energy Trend were below the level of real production costs for many producers in the country, according to industry sources. An analyst from the region also confirmed that no major manufacturer could sell his products at the prices stated at PVInsights. They are too low.

The current data from PVInsights show an average spot market price for multicrystalline solar cells of US$0.217/W and of US$0.218/W for multicrystalline solar cells from Taiwan. As for EnergyTrend, average prices for these categories are US$0.229/W (China) and US$0.233/W (Taiwan). According to data from industry sources, Taiwanese cell manufacturers are not aware of how the two institutes are coming to their price estimates. Many of them claim they have so far not even received price queries from PVInsights or EnergyTrend.

China is the world’s largest solar cell producer, but its cells are generally used for in-house solar module manufacturing. Taiwan, instead, is currently the world’s largest solar cell exporter. For this reason, PVInsights and EnergyTrend should request Taiwanese producers to provide their prices, according to industry sources. China-based module manufacturers, which import a negligible amount of solar cells from Taiwan, usually only indicate the lowest prices of Taiwanese manufacturers to PVInsights and Energy Trend, and these are ultimately used by the two companies to generate their price index.

International solar module buyers use the index for their negotiations with sellers. In sale contracts there are often adjustment clauses, which are based on the prices established in the index. Thus, Chinese manufacturers may be able to reduce spot prices, according to industry sources.

Taking into account an export volume of 8 GW per year, this would cost $0.01/W and would reach a total of $80 million in lower revenue for Taiwanese manfuactures. As the complaint is directed against both market research companies, it is possible that the price difference to the real production costs is higher than $0.01/W – at least in relation to the data of PV Insights. A Taiwanese industrial representative said that the losses of all Taiwanese solar companies in the past fiscal year totaled TW$13.4 billion (close to US$444 million or €378.5 million). It is difficult to estimate the percentage to which the low prices of PVInsights are responsible. However, PVInsights is responsible for most of the losses, he explains.

The allegedly low prices from PVInsights could soon have an effect on the results of European photovoltaic manufacturers. The EU Commission plans to gradually reduce the minimum import price for Chinese cell and module imports from its current level starting from September 2018, based on the PVInsights price level of the first quarter of 2017. For multicrystalline solar modules, this would amount to €0.33/W, and for multicrystalline solar cells to €0.195/W. For monocrystalline solar cells and modules minimum import prices would be €0.218/W and €0.38/W, repectively.

PVInsights provided pv magazine with the following statement: “Until now, we haven’t received any official document from the Taiwan Fair Trade Committee. PVinsights, a professional market research firm, has always stood in a neutral position to provide the most reliable solar market information, which is well recognized by industry professionals over the world. Of course, we have been consistently in contact with Taiwanese industrial professionals, part of our global information sources over a decade. Regarding the accusation from TPVIA, there is no factual basis.”

Jan. 19, 2022 update

PVInsights has this month provided pv magazine with an official document from the Fair Trade Commission (FTC) Taiwan, which investigated the case. According to this document, there is no evidence that PV Insights has violated Taiwan's Fair Trade Law. The FTC, therefore, issued the following conclusions on Aug. 28, 2019:

• The Taiwan FTC found it difficult to conclude that PVinsights violated Article 25 of the Taiwan Fair Trade Law.
• The Taiwan FTC concluded that the practice of PVinsights was not meant to deceive, mislead or conceal important information to cause others to engage in transactions with PVinsights.
• The Taiwan FTC said that the solar cell market prices announced by the accused had no impact on the actual closing price between the buyer and seller of solar cells.
• The Taiwan FTC found it impossible to conclude that the prices announced on the aforesaid websites could mislead buyers and sellers to make wrong transaction decisions and end up affecting trading orders on the market and causing harm to market competition.