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Why Germany could join USA, India in Anti Dumping Duty on Chinese Solar Panels Imports

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Solar Trade Wars are becoming the norm in the globe these days with the major one between USA and China.The instigator is the German solar company Solarworld which helped started the ITC Case in the USA. India too is thinking of putting some kind of import duty to protect its domestic solar panel producers which are dropping like flies. Chinese solar panel producers have swamped the world with super cheap solar modules. though a part of their low prices can be explained by competitive advantage, another part is due to  the labor, capital subsidy given by the Chinese government. It would not take  a rocket scientist to say that some of the biggest Chinese solar companies are insolvent and would be dead within a month without Chinese state loans.

Germany might start an a dumping duty on Chinese solar panels due to the following reasons

1) Germany has just got too much solar energy right now with an explosion of solar panel installations in December.It has to slow down the solar panel installation which despite 50% cut in Feed in Tariffs is still making new records.Germany Solar Energy Market is the Biggestin the world by far with more than 20 GW

The influx of cheap solar panels from China has let the December 2012 explode to almost 2-3 GW according to the German solar association BSW. The high rates of return of over 10% due to super cheap Chinese solar panels at 80-90c/watt has been the major reason for the explosion in demand which could be the biggest month in Germany ever. While German Solar Market has remained robust as ever,the German solar panel producers like Solon, Sunways have been vanquished with a number of major solar companies failing and getting acquired. The Asian solar companies have been the major beneficiaries of this demand growth in Germany and Europe.

The massive rise in demand will imply that according to the EEG ,t here will be a 15% cut in July 2012 after a 15% cut in January 2011. This would bring the solar FIT prices quite low and provide a restraint to the galloping German solar energy installations which is reaching more than 25 GW .

2) German solar panel companies are going bankrupt (5000 in 2011) and solar jobs are disappearing

3) Chinese solar manufacturers are gaining the most from the German Demand.They are starting to acquire German solar companies on the cheap effectively taking over the German solar industry.

LDK has managed to spend 22 million Euros despite burning hundred of millions of dollars in cash because it has got the Chinese government trillions backing it.So while Western companies burn and crash,the big crony Chinese companies can expand and acquire.

Most of the German solar manufacturing industry is finished and it is unlikely that except a couple of them like SM Solar or Wacker will live to see 2013.Q-Cells too should go bankrupt or get consolidated .Note despite European companies shifting factories to Asia ,they just can’t compete.Some of the smaller module makers with 20 MW plants have seen huge losses with the equipment not selling for 10 cents on the dollar

Solarworld Planning China Anti-Dumping Case in Europe, CEO Says

Solarworld seeks to join forces with European peers to take its case to the European Commission’s competition agency after Chinese panels were allegedly dumped in recent months on German markets at below-market costs, Asbeck said today.A year-end solar-panel installation rush in Germany, which added a record 3 gigawatts in December according to the grid regulator, was sparked in part by “massive” panel inventory from Chinese manufacturers installed in large-scale solar plants at “dumping prices,” Asbeck said in a phone interview.


Sneha Shah

I am Sneha, the Editor-in-chief for the Blog. We would be glad to receive suggestions, inputs & comments on GWI from you guys to keep it going! You can contact me for consultancy/trade inquires by writing an email to

3 Responses so far | Have Your Say!

  1. Skywise

    I don’t think Germany is going to put an anti-dumping duty on Chinese solar modules because:

    1. Though Germany loves solar power, it loves CARS a lot more. VW, BMW, Audi, Porsche, and Mercedes make a LOT of money selling cars in China. If Germany puts duties on Chinese modules, the Chinese will put duties on German cars. That’s the way the game is played and Germany will not risk it.

    2. Germany companies couldn’t and can’t match China’s production costs. When German module manufactures had most of the German market, everyone in Germany complained that the modules were too expensive compared to Chinese modules and that this was costing consumers too much money. Now Chinese modules have reached sufficient quality (did anyone seriously believe that day would never come?) and Germany can drastically reduce their feed-in tariffs like they wanted to for so long. Duties that artificially increase the cost/price of solar modules (also the German modules because there will be more demand for them) are not politically viable.

    Also I think it’s only fair to add a bit of perspective on China’s “dumping”. It’s true that China provided cheap startup capital to some companies who grew to be very large wafer and module producers. But they still have to purchase silicon feed-stock from the major silicon manufacturers. And where are these manufacturers located? That’s right: mainly in Germany and the USA.Those companies are in bitter competition and built HUGE amounts of silicon capacity. Those factories take YEARS to build and their plans were announced YEARS ago. EVERYONE knew much cheaper silicon was coming. Meanwhile in China (a very large country with many provinces) the provinces that didn’t already have module manufacturers helped get some created. Was that illegal? Of course not. In retrospect it was unfortunate and probably a bad idea. But what was China (i.e. their central government) supposed to do? Ban them? Impossible. These newer companies were not locked into the same long-term silicon purchase contracts as the original (now much larger) module producers. And the (German and American!!) silicon producers now had too much silicon from factories that need to run at full capacity. So they could (and did) sell the silicon to the newer (smaller) Chinese module manufacturers. And those manufacturers could (and did) undercut their larger competitors on price. That produced the “perfect storm” we are now experiencing.

    The point: (a) German and American silicon producers kicked off this storm, NOT the Chinese. (b) Solar World and other higher cost producers (and the countries that host them) KNEW this was coming and apparently did nothing to prepare for it. (c) Nothing in the whole process (cheap capital and tax breaks to businesses, aggressive build-up of capacity, engaging in a price war) is illegal or even unusual in developed economies.

    Therefore, I find the trade case from Solar World and it’s allies untenable. Germany and the USA wanted cheaper modules, made it possible with cheap silicon, and now they’ve GOT cheaper modules. China gave them exactly what they wanted. To now cast them as villains is just absurd.

  2. Abhishek Shah

    Brilliant Comment . Deserves to be an article by itself