India has become the latest country to contemplate anti dumping duties on imports of Chinese solar panels which have all but wiped out the country’s solar manufacturing. Note India is not alone as the vibrant solar manufacturing companies in US and Europe have been wiped off the map as solar panel prices fell from $4/watt in 208 to 70c/watt in 2012. The main reason for the crash in solar panel prices has been the relentless cost cutting and growth of Chinese solar panel companies. Note this price crash is now threatening the survival of top Chinese solar companies as well as LDK is selling its family siliver (land and real estate). Others like Suntech have sharply cut down production and fired people as debt overwhelms the sector.
Chinese diplomacy is going into overdrive to prevent Europe from imposing harsh duties on Chinese solar modules with German chancellor Merkel asking EU to moderate its stance. Now China is also imploring India to solve this trade row through dialogue as India is one of the fastest growing solar panel markets in the world. However India has little to gain from dialogue with China as its solar companies have either shut down or are running at 10-20% utilization as they are simply unable to compete at the 70c/watt solar panel prices.
Hard Times for Indian solar panel producers
Solar Companies around the world are facing hard times with bankruptcies galore. Not only hundreds of small installers, erstwhile behemohts like Q-Cells have defaulted on debt and declared bankruptcy. So its not a great surprise that Indian solar companies which were never very competitive anyway are facing equally bad times. The biggest and oldest solar panel companies like Moser Baer and Tata BP Solar are facing survival questions. These companies have seen departure of top executives and are looking for CDR resolutions. Moser Baer which had invested hundreds of millions in investments into crystalline silicon and thin film solar is having difficulty in paying back its debt. The stock price has cratered to almost nothing as well. The company which had invested into exotic solar technologies as well as the mainstream has managed to fail everywhere. The company had even invested in a polysilicon startup as well as concentrated solar power technologies. It shut down its thin film equipment plant a year ago as Applied Materials the equipment supplier itself got out of the business. The company is now mainly into the EPC business. Other companies like Indosolar are also looking like a write-off. When the biggest solar panel companies like Suntech are themselves in such trouble, it is a surprise that these companies are managing to produce anything at all.
Europe starts anti dumping against Chinese solar panels
The worst fears of the Chinese solar panel producers have come true with Europe starting the history’s biggest anti dumping case against their products. A trade group called ProSun led by German solar panel maker Solarworld, complained against super cheap imports of solar modules from China to the EU 45 days ago. The EU has found there is a case to be heard and has started the anti-dumping measures against 21 billion euros of Chinese solar panel imports and the case will be completed in 15 months time. If found to be true, Chinese solar panels could be levied with heavy duties for a period of 5 years.
Unlike the US – China solar panel spat, EU is a much bigger fight as China imports most of its production to Europe particularly countries like Germany and Italy. In fact, the Chinese solar growth has been largely driven by the solar subsidy policies in the European countries. Until last year, almost 95% of the Chinese solar panel production was exported to Europe. Europe accounts for almost 75% of the world’s demand of solar panels and has been instrumental in the growth of the Chinese solar industry. Note China accounts for less than 10% of the demand, while it supplies almost 60-70% of the global supply of solar panels. While the US was a small market comparatively, Europe is a huge market and the loss of this market will sound the death knell of the biggest Chinese companies.
Inventories mount in China as Solar Jobs get Slashed
In China’s Jiangsu province, near Shanghai, mountains of solar panels sitting around a factory owned by Trina Solar Ltd are fast losing their value.Trina and other Chinese solar companies, including Suntech Power Holdings Co Ltd and Yingli Green Energy Holding Co Ltd , hold inventory of about 5 gigawatts (GW), analysts say, nearly one-sixth of annual global demand.The companies, which face a steep anti-dumping duty in the United States and possible tariffs in top market Europe, have few options but sell the existing excess cheaply in China.”With the anti-dumping investigation starting in Europe, Chinese companies are avoiding shipping to the continent at the moment,” said analyst Stefan de Haan at business information provider IHS Inc.”This will further increase inventory over the next few weeks or so.”Companies have already started slashing production but they have a long way to go. Chinese makers have the capacity to produce 50 GW of solar panels a year — well above global annual demand for 30 GW.
China requests India to solve trade row through dialogue
China’s Ministry of Commerce spokesman Shen Danyang on Wednesday called for solar panel makers from China and India to continue with talks and to cooperate to solve trade frictions.
Shen’s remarks came as some panel makers in India filed applications for an anti-dumping investigation against solar panels made in China and other countries.
Expressing concerns over India’s possible moves, Shen urged producers from both countries to diffuse any dispute through negotiation.
He said earlier this year, companies from the two countries had agreed to conduct technology cooperation in this area.
“If the Indian authorities insist on launching probes into China-made solar panels, it will not only hurt the two country’s cooperation in the new energy sector, but will also cause harm to India’s local companies,” he said.
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