As the dust settles following Wednesday's submission of anti-dumping and countervailing-duty filings related to Chinese solar cells and modules, the eyes of industry observers are turning to the U.S. Department of Commerce (DOC) and International Trade Commission (ITC) to see how the drama will unfold.
The seven-party Coalition for American Solar Manufacturing, led by U.S. module maker SolarWorld, is accusing the Chinese government of cushioning its solar sector with land grants, export assistance, preferential loans and other state-sponsored subsidies. These measures have artificially deflated the price of Chinese products and caused "material injury to the domestic industry," the coalition's petition states.
The complaint reads.
"Chinese producers and exporters have pushed - and will continue to push - large and growing volumes of dumped and subsidized [crystalline-silicon PV] products into the U.S. market, regardless of demand. In the absence of the restraining effects of anti-dumping and countervailing-duty orders, the domestic industry faces a grim future."
According to Kevin Kilkelly, president of SolarWorld Americas, suspicion about unfair Chinese trading practices has been building for some time.
He tells Solar Industry.
"We'd been monitoring the competition very closely for years. We were tracking economic data coming in from the U.S. Customs Department."
Kilkelly says the company's examination found that in July alone, the volume of Chinese imports exceeded the total for all of fiscal-year 2010.
He remarks.
"That triggered thoughts of dumping."
The coalition wants the ITC and DOC to impose duties to counteract Chinese subsidies and bring the prices of imported solar products to true market levels.
John Smirnow, vice president of trade and competitiveness at the Solar Energy Industries Association says.
"U.S. companies have the right to bring a case. There are competitive pressures in the marketplace, and the coalition believes the competitive pressures are the result of unfair competition."
However, the U.S. industry will have to be patient to see if remedies are forthcoming. Smirnow says the federal agencies will need to collect a "tremendous amount of data" and analyze that information. Preliminary determinations from the ITC and DOC will not be made for at least five months, and the case will likely take upwards of a year to get resolved.
Unsurprisingly, this issue is huge news at trade show Solar Power International (SPI), which is taking place this week in Dallas. During a special session held Thursday morning, experts outlined the case and explained that the investigation will look for evidence of adverse price effects, such as imports underselling domestic products, as well as for signs of declines in U.S. companies' sales, market share and profits.
Jeffrey Telep, a partner in King & Spalding LLP's international trade group, told SPI attendees that the petition names several Chinese companies that are allegedly dumping products into the U.S. market, but it is uncertain which exporters will be investigated and to what extent.
But ultimately, he explained, if federal authorities find merit in the allegations, U.S. Customs will collect duties equal to the dumping margin and subsidy rates. Presumably, these measures will have a measurable, positive effect on the U.S. solar market.
For his part, Kilkelly explains SolarWorld's attitude succinctly:
"This is about making an even playing field."
COMMENTARY: In a blog post dated September 6, 2011, I commented on a report by Solar Energy Industries Association and GTM Research released in August 30, 2011, that reported that the U.S. solar industry had produced a net surplus of $1.9 billion for the year ending 2010.
The report is titled, US Solar Energy Trade Assessment 2011, claims that the US solar industry exported a net of $1.9 billion in solar photovoltaic (PV) and solar heating and cooling (SHC) components in 2010 globally, with $240 million of orders coming directly from China. Total exports totaled more than $5.6 billion, according to the report.
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Though the US has continued to buy PV modules from China, the report found that the US was selling China an ever greater value of capital equipment and polysilicon for PV modules.
Solar Energy Industry Association (SEIA) President and CEO Rhone Resch in a statement said.
"In 2010, we grew by over 100%. We achieved a positive trade balance and we exported more goods and services to China than we imported".
Shayle Kann, managing director of Solar at GTM Research said.
"The PV market is more complex than meets the eye. To completely understand solar trade flows, this report looks both at earlier steps in the value chain and at non-panel components of a solar PV system."
In another blog post dated September 29, 2011, I pointed out that the DOE loan of $535 million to Solyndra pales in comparison to the number and size of the loans the Chinese government is furnishing its solar PV manufacturers. It's obvious that Chinese manufacturers are getting a lot of help, something that U.S. PV manufacturers are not.
I have a very good feeling that U.S. solar producers will finally get their day in court, and the Department of Commerce and International Trade Commission will have no choice but to rule in their favor given the massive evidence of unfair trade practices and massive dumping of PV panels in the U.S.
Hopefully, this will begin a series of complaints by other U.S. industries harmed by Chinese producers dumping their products on our shores and killing our industries.
Courtesy of an article dated October 20, 2011 appearing in Solar Industry and an article dated
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