By Roy L Hales
Originally published on The ECOreport
Part two of a two-part series.
The testimonies coming out of the anti-dumping hearings are horrendous, but what does the solar Industry think? Peter Varadi, who founded the first solar company back in 1974, questions why the US would provoke a trade war with China on the basis of a petition from maybe a half dozen companies. The Solar Energy Industries Association agrees.
“The ongoing U.S. trade case was filed by a single company,” emailed John Smirnow, SEIA Vice President for Trade and Competitiveness. “In contrast, there are more than 30,000 individuals employed in the U.S. solar manufacturing sector plus more than 110,000 employed in the solar services sector. We work closely with the membership to develop SEIA’s trade policy and our members overwhelming support SEIA’s position on the U.S.-China trade conflict, i.e., more litigation is the wrong approach—the industry needs a negotiated solution.”
SEIA has been trying to achieve a negotiated solution that “addresses SolarWorld’s competitiveness concerns while allowing the U.S. solar industry to continue expand.”
Smirnow added that the key document expressing SEIA’s position was released the day new investigations were filed:
SEIA Calls for Negotiations to End China Solar Trade Dispute
Tuesday, December 31, 2013
WASHINGTON – Rhone Resch, president and CEO of the Solar Energy Industries Association (SEIA), released the following statement today in response to new U.S. trade petitions filed by SolarWorld USA against crystalline silicon solar products from China and Taiwan:
“We oppose today’s escalation of the U.S.-China solar trade conflict. More litigation is the wrong approach. Trade litigation is a blunt instrument and, alone, incapable of resolving the complex competitiveness issues that exist between the U.S. and Chinese solar industries. It’s time to end this conflict and negotiations must play a role.
“For well over a year now, SEIA has encouraged the U.S. and Chinese governments and key industry stakeholders to find common ground, even putting forth a settlement proposal. SEIA’s proposal provides a mutually-satisfactory resolution which recognizes the interests of all solar stakeholders and not just one segment of the industry. To the best of our knowledge, however, the U.S. and Chinese governments have neither adopted SEIA’s proposal as the basis for negotiations nor put forth any meaningful offer to resolve the broader conflict. It’s time for both governments to get in the game and end this conflict – we urge the United States and China to immediately commit to serious, results-driven negotiations.”
The Department of Commerce imposed a tariff in response to SolarWorld’s complaint in 2011, but many Chinese manufacturers got around it by using solar cells manufactured in third countries. About 70% of Chinese solar modules entering America now use Taiwanese cells. More than $2 billion Chinese solar modules were sold in the US during 2012.
According to Minnesota Congressman Rick Nolan, as a result of the influx of cheap Chinese solar modules, “More than 20 U.S. companies went out of business, went bankrupt, or had significant layoffs. Thousands of workers lost their jobs, impacting their families, communities and local businesses.”
American tariffs appear to be inflicting similar damages on the other side of the Pacific. China Daily reports that exports to “what was once the Chinese industries second-largest export destination have fallen in half.” Further tariffs could result in a “total eclipse” of trade.
Varadi writes, “It is obvious that the Chinese PV industry had a large overproduction in 2011 and 2012 and wound up with large unsold inventory which they wanted to get rid of. It is very likely that the Chinese PV industry was heavily subsidized and sold PV modules at a price, below cost.”
He adds that the best thing the Department of Commerce could do, to help the American solar industry, would be drop all tariffs! There are 3 to 4 solar design and installation jobs for every manufacturing job!
Varadi also added another spin on what is beginning to sound like a bead game.
He argues that SolarWorld “is a German company which raised money in 1999 in Germany and is listed on the German stock exchange. SolarWorld has some holdings in the USA.”
To which SolarWorld Americas points out that they descend from an American company that was founded in 1975. It has gone through several changes of ownership, the most recent being when Solar World (German) acquired it in 2006.
However Varadi points out that “eleven Chinese companies raised over 2.1 billion dollars of capital on US stock exchanges during the years 1997 to 2010. The miraculous ascent of the Chinese PV industry started when this money was raised for them by the most prestigious US underwriters Morgan Stanley, Credit Swiss First Boston, Goldman Sachs, Merrill Lynch, Lazard, Piper Jeffrey, and CIBC World Market. Ownership in these Chinese Companies mostly by US investors ranged from 5 to 90%.”
At which point one starts to wonder how to determine which company is Chinese? which is German? and which is American.
Horrendous as the testimonies coming out of the anti-dumping hearings are, the definitive voice on this subject comes from SEIA. It speaks on behalf of the nation’s solar industry in saying the US should be seeking a negotiated settlement with China, not impose further tariffs.
(Image at top of page: The sky is reflected on the solar panels at the Baldock Solar Highway project. (2011) – Courtesy Oregon Department of Transportation)
Disclaimer: Any opinions expressed are those of the author and not necessarily those of PV Solar Report.