As I See It

Will a solar dumping finding make a difference?

WHEN I ATTENDED the Solar Power International Show last fall, the people from the Solar Energy Industries Association seemed a little gun-shy about the failure of Solyndra, as if the entire solar industry would be tarred with the same brush. SEIA need not be worried. From the robustness of SPI, the solar industry looks to have achieved critical mass that will sustain it even if subsidies run out in 2016. There were dozens, if not hundreds, of solar collector manufacturers, including Americans like Westinghouse, an entire Korean contingent, and Japanese old standbys like Sanyo. I worry a bit about solar thermal, but photovoltaics are here to stay.

Part of the blame for Solyndra’s failure — aside from bad management — was assigned to plunging prices for PV panels, especially those coming in from China. It looks like a legitimate complaint that will be upheld by the U.S. Department of Commerce in a ruling expected at the end of this month.

On December 2, the International Trade Commission issued a unanimous preliminary determination that Chinese trade practices are harming the U.S. domestic solar manufacturing industry. The next step in the trade case will be Commerce’s March 2 preliminary anti-subsidy determination. On March 27, Commerce is scheduled to make its preliminary anti-dumping determination on whether to impose duties to offset the effects of Chinese import pricing at artificially low prices.

Last October 19, representing a coalition of seven U.S. manufacturers of solar cells and panels, SolarWorld Industries America Inc., the largest domestic producer, petitioned the federal government to halt what the company describes as an ever-rising tide of heavily subsidized solar cells and panels that China’s state-supported solar industry is illegally dumping into the American market.

The Coalition for American Solar Manufacturing — representing a significant majority of U.S. production of crystalline silicon solar cells and panels — filed complaints with the U.S. Department of Commerce and International Trade Commission seeking relief from China’s illegal trade practices. The complaints aim to end China’s decimation of U.S. solar manufacturing and jobs.

The cases, which allege dumping margins well in excess of 100% as well as massive subsidies, are among the largest against China — and the largest in renewable-energy industry history.

In early February, the coalition received some heavy-duty support. A revised research presentation from the National Renewable Energy Laboratory, posted on the NREL website February 7, concluded that Chinese production of crystalline silicon solar technology for the U.S. market costs more than U.S. production for the domestic market, when the costs of shipping are included.

The U.S. coalition contends the findings validate its position that the Chinese solar-manufacturing industry enjoys no cost advantage in solar production costs but, rather, benefits from a government-underwritten export campaign to injure competition from U.S. manufacturers. At least 12 U.S. manufacturers have suffered layoffs, plant shutdowns or bankruptcies over the past two years.

The NREL presentation, “Solar PV Manufacturing Cost Analysis: U.S. Competitiveness in a Global Industry,” concludes that Chinese producers have an inherent cost advantage of no greater than 1% compared with U.S. producers. However, when trans-ocean shipping costs are counted, Chinese producers face a 5% cost disadvantage, according to the analysis. “Massive government subsidies,” NREL said, sponsor the Chinese industrial drive to export about 95% of domestic production, a campaign that has already seized 55% of global market share, according to NREL.

“This analysis from the renewable-energy research arm of the U.S. government corroborates our view that an export drive sponsored by the Chinese government is improperly intervening in the U.S. market,” said Gordon Brinser, president of SolarWorld Industries America Inc., based in Oregon. “Highly efficient U.S. producers like SolarWorld can vie with any company in the world in legal competition. But the government of China’s illegal trade practices are neither economically nor environmentally sustainable for anyone. Free trade is trade free of illegal foreign government intervention.”

So if Commerce imposes anti-dumping duties on Chinese solar panels, will that solve the problem? I’m not hopeful. The Chinese will bluff and bluster and impose retaliatory tariffs on American imports. They’ll continue to subsidize their industries. I just shake my head some times. The Chinese could easily compete on their own merits. They’re smart people. After all, they invented gunpowder in the 8th century. Who needs to cheat?

Remember when Wen Ho Lee was charged with stealing nuclear secrets at Los Alamos? The Chinese retort was that they were smart enough to figure out nuclear technology without stealing any of ours. Fair enough.

But I’ve heard enough horror stories and seen enough blatant copies with my own eyes to expect the Chinese to compete on a level field. I remember walking through the Chinese pavilion at one show with Dave Yates looking in disbelief at exact copies of American, German and Danish circulators. I had a Swiss faucet company show me their wares in a hotel room, telling me, “We don’t want to be on the show floor because the Chinese will copy everything we have.” I went to a show in Germany where a major plumbing manufacturer told me that when the show opened their booth was filled with 200 Chinese who stole all of their faucet inserts.

I don’t really want to get into China-bashing, but they give me so much material it’s like shooting fish in a barrel. So if the Chinese are all they think that they’re cracked up to be, then they don’t need to cheat, steal or dump. But I’m not hopeful.

Follow me on Twitter @bobmader

Hide comments

Comments

  • Allowed HTML tags: <em> <strong> <blockquote> <br> <p>

Plain text

  • No HTML tags allowed.
  • Web page addresses and e-mail addresses turn into links automatically.
  • Lines and paragraphs break automatically.
Publish