INDUSTRY I ISSUES
Officials at the Ministry of Commerce were keen to point out that China currently registers a deficit of nearly 2 billion dollars with the USA as they export solar products and the raw materials and equipment that China needs to build the solar products. The situation was a tinder box of issues that went well beyond the solar industry and China soon responded by initiating its own case against the USA claiming that country had been dumping polysilicon, the raw material required for silicon solar manufacturing, into China at subsidised rates. Both cases are at the mercy of the complicated trade policies that make up inter country agreements and come down to presentation of facts.
Why the discrepancy
The CASM consortium feel there is a co-ordinated approach from within China to actively undermine the local industry creating an unfair playing field. The contention is that US made modules cannot compete with the Chinese. CASE on the other hand claims that the problem is caused by a global oversupply of both companies and product and the industry is experiencing a consolidation as a normal maturation process.
This difference of opinion underlines the different sectors represented and the CASM group led by SolarWorld are companies most hit by the problem and both sides are guilty of presenting facts and arguments to suit their ideas. CASM has made much of the number of solar jobs in the USA, comparing them to mining jobs but the mining figures only counted those in actual mining whereas the solar figures refers to the whole value chain. The area CASM is hitting at is not the highest value for the US solar industry.
In fact most of the profits that are made in the USA solar industry come from the companies making the manufacturing tools for solar or providing the raw material in such quantities as to keep the USA in a near $2 billion surplus when it comes to USA China solar trade. Domestically the US solar market jobs are either in that part of the market or at the consumer end of installation. In fact both of these sector benefit from an increase in Chinese panels and subsequent price drops. Any punitive action by the USA government would see many installers out of business and a decrease of activity across the board. Solar products in general would increase in price in the USA if tariffs were introduced, going against the longer term goal of an affordable and sustainable industry. Some commentators are suggesting that it doesn’t matter how the situation arose as it is good for the long term goals of the industry.
Sadly the rhetoric and tactics of both coalitions contains a great deal of nationalism and brow beating but that is to be expected from such opposing view points. Both camps have aired the process in public with CASE releasing the letter they sent to CASM requesting they stop the petition and CASM published the unequivocal reply. CASE constantly refers to SolarWorld as a German company but it is the USA based arm of the company that has begun proceedings. CASE accuses CASM of beginning a destructive trade war with China but the events leading up to this financial stand off are long running and involve a great deal more than the solar industry. The lawyers representing the CASM case have extended their own trade concerns and has
18
www.solar-international.net I Issue I 2012
now filed another petition on behalf of several U.S. companies that make towers for wind turbines against China and Vietnam.
CASE is ensuring USA policymakers are aware of any commentary by independent analysts and USA company officials who rely on exports to China for their business and jobs in many states around the country to demonstrate how destructive the SolarWorld petition is. An economic analysis prepared by The Brattle Group and commissioned by CASE reported that a 100% tariff on imported solar PV cells and modules from China would result in as many as 50,000 net lost jobs in the U.S. over the next three years. Furthermore, retaliatory tariffs placed on U.S. exports of polysilicon to China would put nearly 11,000 more American jobs at risk in the first year following tariff imposition. The study examined the impact that imposing a 50% tariff or a 100% tariff would have on the U.S. solar industry through 2014. Both scenarios are lower than the up to 250% tariffs sought by SolarWorld and the report revealed huge job losses in either scenario.
Dr. Mark Berkman, author of the report and principal at The Brattle Group discussing the methodology said,, “While the U.S. solar industry has many facets and is quite complex, we were able to model the industry by utilizing straightforward economic analytical methods. We started by projecting the reduced demand for solar systems resulting from price increases due to tariffs. We then analysed projected job gains and losses under two scenarios, each using a 50% and 100% tariff on imported solar cells and modules. Even under the most conservative assumptions, we did not find a scenario where imposing a tariff would create more jobs than it eliminates.”
Of course CASM has released its own studies and opinions all containing equally compelling statistics including one from Hari Chandra Polavarapu, managing director of solar and clean- technology research for brokerage firm Auriga in the USA. Polavarapu contends that China’s alleged actions against foreign domestic industries not only distort markets but also sap the power of competition to drive efficiency and innovation. Polavarapu characterizes China as a “state sponsor of predatory capitalism and asymmetric warfare” that “does not help in weeding out inefficient players but poisons the profit pool for everyone.”
Strong words from both sides but how much is the process damaging the USA and global industry. Of course only time will tell but the ramifications have already begun to leak further afield with India now suggesting it will place both Chinese and USA solar based trading under scrutiny and SolarWorld has announced their intention of bringing similar petitions to the European Union creating a similar trade confusion and potential disruption to the industry growth. At present Europe accounts for
Page 1 |
Page 2 |
Page 3 |
Page 4 |
Page 5 |
Page 6 |
Page 7 |
Page 8 |
Page 9 |
Page 10 |
Page 11 |
Page 12 |
Page 13 |
Page 14 |
Page 15 |
Page 16 |
Page 17 |
Page 18 |
Page 19 |
Page 20 |
Page 21 |
Page 22 |
Page 23 |
Page 24 |
Page 25 |
Page 26 |
Page 27 |
Page 28 |
Page 29 |
Page 30 |
Page 31 |
Page 32 |
Page 33 |
Page 34 |
Page 35 |
Page 36 |
Page 37 |
Page 38 |
Page 39 |
Page 40