Europe’s Solar Trade Policy

The whole global solar industry is moving ahead at a rapid pace with regulators and policy makers not being able to keep up with the fast change happening in the industry. European Union is one of the biggest group of useless bureaucrats on the planet. There are mostly an unelected group of appartchiks who form laws and regulations for the whole of Europe. This is on top of the regular bureaucrats who operate the country level. Coming to solar energy, European Union had imposed a minimum import price on imports of solar panels a few years ago on a complaint by a German maker of solar panels. The European Union did not want to go into a trade war with China over imposing anti dumping duties on Chinese modules. To pacify both sides, the EU decided to implement an agreement with China where both the minimum prices and volumes of solar panel to be imported were fixed. However, like all fixed rules in a free market, these quickly became obsolete as solar prices and costs fell with increasing scale and improving technology.

Also read Europe targets China solar with anti-dumping again, brings in Taiwan and Malaysia into radar

However, the EU bureaucrats maintained the status quo leading to the whole agreement being junked by major Chinese solar exporters. Their prices were much below the MIP even after paying the European duties. This has been the case over the last couple of years. The Chinese makers have also built a huge amount of solar cell and panel capacity in South East Asian countries like Vietnam, Thailand and Malaysia which allows them to easily circumvent these rules and regulations.

The solar industry in the west has created hundreds of thousands of jobs in the fields of installation, business development and financing. These jobs are a direct result of the super low prices of solar panels which has allowed it to compete with traditional fossil fuels. The EU could benefit from many more jobs and higher investment if it just junks the stupid rules that it has developed. They are no longer relevant. However, the EU in all its wisdom is going to extend this price by a further couple of years in ruling which is expected to come out in March 2017.

The EU will decrease the minimum price to 46 euro cents from 56 euro cents now, however that will still be much higher than the current price of 37 US dollar cents a watt pricing of solar panel in the international markets. In the next 2 years, the price of the panels may fall further which may look this rule look even more stupid that it is already possible. The Commission has stated that it knows that imports and installation have created around 5-10x more jobs in the solar industry but it will still burden the whole continent with higher prices for just 5-10k jobs that currently exist in solar manufacturing.

In the documents, the Commission said ending the measures would likely lead to a continuation of Chinese subsidies for the solar sector and a significant increase in dumped imports of solar cells and modules.It also said the measures would only have a limited effect on demand and that comparisons between the 50,000 people working in importing and installation and the 5,000 to 10,000 in manufacturing were not appropriate. Job gains in the former could be outweighed by losses in the latter, it said.

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