Chinese Solar Makers Hit Back, Accuse U.S. Firms of Dumping

While the U.S. government investigates the possibility of illegal government subsidies in the Chinese solar industry after seven American solar companies filed an anti-dumping petition last month, Chinese manufacturers will respond by asking the Ministry of Commerce to launch its own investigation into the sale of U.S. solar panels in China. From China Daily:

Gao Hongling, deputy secretary-general of the China Photovoltaic Industry Alliance, told China Daily on Sunday that the alliance is finalizing a complaint alleging that US manufacturers are selling their products at prices below cost in China.

“The report will be sent to the Ministry of Commerce soon,” she said.

Gao added that the alliance is also preparing another petition for the ministry regarding an investigation into allegedly received by US manufacturers.

According to the alliance, many Chinese polysilicon factories stopped or reduced production in the third quarter and more than 2,000 people in the industry lost their jobs in one province alone.

Foreign countries, led by the United States, dumped 47,500 tons of polysilicon in China in 2010, 20,000 tons more than the previous year, according to statistics from the alliance.

As it plans retaliation, however, the Chinese solar industry plans to shift a portion of its production to South Korea, Taiwan and the United States in an attempt to neutralize the trade case already filed in Washington. From The New York Times:

Having hired trade lawyers to advise them on the Commerce Department case, Chinese solar panel manufacturers are increasingly gloomy about their chances of winning it, said Ocean Yuan, the president of Grape Solar, a big importer of Chinese solar panels that is based in Eugene, Ore.

Mr. Yuan said that Grape Solar was already negotiating with several Chinese manufacturers, whom he declined to identify, to perform final assembly of solar modules in Oregon. That would be the last step in new supply chains the Chinese industry intends to set up that would start in China then run through South Korea and Taiwan in hopes of avoid any new tariffs.

According to Reuters, the cheap funding from state-owned banks to China’s solar industry – a central component to the U.S. trade complaint – has in fact become burdensome to manufacturers after the flood of cheap products has swelled inventories, shrunk profits and threatened liquidity. On the other side of the Pacific, U.S.-based solar executive Mike Hall warned in Forbes last week that a trade war in China would hurt rather than help the American solar industry:

Ultimately, the most important long-term question here is, “How does a module price crash affect the U.S. worker and the U.S. economy?” Is it better for our country to impose tariffs on imported solar modules, or continue to allow the laws of supply and demand to pull prices down even at the risk of some local manufacturing?  I don’t think I am alone among solar executives in believing that the greater benefits of the lower prices ultimately outweigh the pain that is being felt by a small number of U.S. manufacturers.

The fact is that with module prices falling every day, more and more of the system cost and revenue is going to U.S. jobs. This includes solar installers and integrators, and local makers and assemblers of non-module components such as racking, tracking, inverters, and junction boxes . This means that every dollar of government support driving solar adoption (which is still exponentially dwarfed by subsidies and tax benefits offered fossil fuel companies), is creating more jobs domestically than even just three years ago.