Euro leaders went on the offensive last week with details of a wide-ranging investigation into whether Chinese solar manufacturers had undercut local companies by dumping below market priced parts on the struggling European market. However, surveying the state of producers in once-promising solar centers like Germany and Spain, it’s becoming clear that this may be too little, way too late.
Launched by European Commission on behalf of EU Pro Sun, an industry association of solar producers from 20 EU countries, the investigation suggests that Chinese companies have been able to dump under market price solar panels and parts on European consumers at a loss thanks to significant financial support from the state. According to a New York Times report, the European Union represented 80 percent of China’s solar sales worldwide so the low prices undercut the local market to the tune of $26.5 billion last year, or 6.5 percent of all E.U. imports for that period.
More than just a loss in revenue, the alleged dumping has come at the expense of much of Europe’s once burgeoning renewable power manufacturing sectors in hotspots like Spain and Germany. The dumping and oversupply helped drive down solar panel prices 24 percent over the last year. Coupled with disappearing state subsidy programs for solar development across Europe, the Chinese sales are said to have made it difficult for even the strongest Euro firms to compete or even survive. Last month saw Germany’s Q-Cells – once the world’s largest producer of solar cells – cleared for sale to South Korea’s Hanwha SolarOne Co Ltd.
Following in the footsteps of a similar US effort to address dumping allegations, which resulted in substantial tariffs on Chinese imports into the US market, the EC investigation takes a broader approach. In addition to looking into the sale of full solar panels, the new campaign will include panel parts as well. Further, the investigation could soon expand to address charges that the Chinese government had illegally subsidized its solar panel market, should a coalition of Euro manufacturers decide to file a complaint. Taken together, the complaints could help create one of the largest trade investigations to date, according to the Times report.
So, why now? Why go through the trouble of launching an investigation that will do little more than strain trade relations with China? Europe’s solar manufacturing sector is now a wisp of its former self so what is the point of it all?
It’s little more than Euro leaders making noise – trying to make a show of protecting the local industry – suggested someone who until recently had held significant stakes in European solar. It’s the same old story and really, it’s too little, too late.
For some though, keeping European solar outfits alive is well worth the fight. In Germany, billions have been dedicated to building a strong domestic solar market, with local companies leading the way until recently. Simply walking away from the sector without a fight is just not an option for some political leaders. According to Bloomberg, German Environment Minister Peter Altmaier suggested that ‘“it’s in Germany’s interest” that the domestic solar industry survives.’
Further south, however, any push towards the investigation, which is scheduled to take about 15 months, offers little hope for the future of local solar. In Spain, government officials saddled with massive spending cuts have it the brakes hard on supporting domestic production or installations. Unlike fellow European members states who have dialed back subsidy programs to reflect new lower panel prices and increased capacity, Spain erased most options completely, going so far as to suggest retroactive adjustments, which earned them legal challenges from existing investors. So, those few Spanish producers robust enough to survive the flow of cheaper panels, will have a hard time living without real, solid good news before the investigation finally runs its course.
To be fair, there are always exceptions and Spain’s Isofoton appears to be one of them. Despite the weekend news of Q-Cells sale, the Spanish firm announced a bid for the company, citing that the final transaction is subject for approval by creditors today. More on that later. However, Isofoton’s strength outside of Spain remains its key to survival. Those with strictly a domestic scope are not as fortunate.
For their part, China’s Ministry of Commerce has expressed “regret” concerning the investigation, suggesting that the EC tread lightly so as not to disturb the growth of global renewable capacity and for that matter, Chinese-EU trade relations. Still, despite such warnings, China has much to lose should the investigation gain traction and further weaken European demand for panels. According to an AP report, a glut of Chinese production and the complaints from the US and Europe have significantly weakened local earnings, with five of the country’s largest manufacturers reporting $250 million in losses in the latest quarter. The losses add to the industry’s bad news, including a reported $17.5 billion in debt accumulated by major Chinese manufacturers.
“Over 60 percent of products are exported to Europe,” Wang Shuai, a spokeswoman for Yingli told the AP. “If the anti-dumping measures really take effect in Europe, that would be a fatal blow to the industry.”
Source: http://www.forbes.com/sites/christophercoats/2012/09/12/is-eu-solar-investigation-too-little-too-late/
Launched by European Commission on behalf of EU Pro Sun, an industry association of solar producers from 20 EU countries, the investigation suggests that Chinese companies have been able to dump under market price solar panels and parts on European consumers at a loss thanks to significant financial support from the state. According to a New York Times report, the European Union represented 80 percent of China’s solar sales worldwide so the low prices undercut the local market to the tune of $26.5 billion last year, or 6.5 percent of all E.U. imports for that period.
More than just a loss in revenue, the alleged dumping has come at the expense of much of Europe’s once burgeoning renewable power manufacturing sectors in hotspots like Spain and Germany. The dumping and oversupply helped drive down solar panel prices 24 percent over the last year. Coupled with disappearing state subsidy programs for solar development across Europe, the Chinese sales are said to have made it difficult for even the strongest Euro firms to compete or even survive. Last month saw Germany’s Q-Cells – once the world’s largest producer of solar cells – cleared for sale to South Korea’s Hanwha SolarOne Co Ltd.
Following in the footsteps of a similar US effort to address dumping allegations, which resulted in substantial tariffs on Chinese imports into the US market, the EC investigation takes a broader approach. In addition to looking into the sale of full solar panels, the new campaign will include panel parts as well. Further, the investigation could soon expand to address charges that the Chinese government had illegally subsidized its solar panel market, should a coalition of Euro manufacturers decide to file a complaint. Taken together, the complaints could help create one of the largest trade investigations to date, according to the Times report.
So, why now? Why go through the trouble of launching an investigation that will do little more than strain trade relations with China? Europe’s solar manufacturing sector is now a wisp of its former self so what is the point of it all?
It’s little more than Euro leaders making noise – trying to make a show of protecting the local industry – suggested someone who until recently had held significant stakes in European solar. It’s the same old story and really, it’s too little, too late.
For some though, keeping European solar outfits alive is well worth the fight. In Germany, billions have been dedicated to building a strong domestic solar market, with local companies leading the way until recently. Simply walking away from the sector without a fight is just not an option for some political leaders. According to Bloomberg, German Environment Minister Peter Altmaier suggested that ‘“it’s in Germany’s interest” that the domestic solar industry survives.’
Further south, however, any push towards the investigation, which is scheduled to take about 15 months, offers little hope for the future of local solar. In Spain, government officials saddled with massive spending cuts have it the brakes hard on supporting domestic production or installations. Unlike fellow European members states who have dialed back subsidy programs to reflect new lower panel prices and increased capacity, Spain erased most options completely, going so far as to suggest retroactive adjustments, which earned them legal challenges from existing investors. So, those few Spanish producers robust enough to survive the flow of cheaper panels, will have a hard time living without real, solid good news before the investigation finally runs its course.
To be fair, there are always exceptions and Spain’s Isofoton appears to be one of them. Despite the weekend news of Q-Cells sale, the Spanish firm announced a bid for the company, citing that the final transaction is subject for approval by creditors today. More on that later. However, Isofoton’s strength outside of Spain remains its key to survival. Those with strictly a domestic scope are not as fortunate.
For their part, China’s Ministry of Commerce has expressed “regret” concerning the investigation, suggesting that the EC tread lightly so as not to disturb the growth of global renewable capacity and for that matter, Chinese-EU trade relations. Still, despite such warnings, China has much to lose should the investigation gain traction and further weaken European demand for panels. According to an AP report, a glut of Chinese production and the complaints from the US and Europe have significantly weakened local earnings, with five of the country’s largest manufacturers reporting $250 million in losses in the latest quarter. The losses add to the industry’s bad news, including a reported $17.5 billion in debt accumulated by major Chinese manufacturers.
“Over 60 percent of products are exported to Europe,” Wang Shuai, a spokeswoman for Yingli told the AP. “If the anti-dumping measures really take effect in Europe, that would be a fatal blow to the industry.”
Source: http://www.forbes.com/sites/christophercoats/2012/09/12/is-eu-solar-investigation-too-little-too-late/
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