European Sanctions on Chinese solar imports will mean a windfall for Taiwanse Solar Cell Companies

Introduction

There are going to be big winners and losers if Europe finds that the biggest anti dumping case against China has hurt its domestic solar companies. 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. 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. This will be in addition to the current AD and CVD duties imposed by US on Chinese solar cell imports. 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.

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The Biggest Losers will be Chinese solar panel producers

The biggest losers will be the Chinese solar panel producers which export billions of dollars of solar panels to European countries. These companies have been already been ravaged by the intense competition and price war with all companies making serious losses over the last one year. A new adverse decision by Europe would sink these companies some of which are surviving only due to government largesse.

Biggest Gainers would not be European but Taiwanese and Koreans

As experience in the US shows, the beneficiaries of this global solar war will not be European solar companies most of which are bankrupt but other Asian countries. Taiwan which has a huge solar cell manufacturing base would benefit because of close ties with the Mainland. Large number of orders have already been coming due to US duties. The imposition of European duties would lead to a flood of orders. South Korean solar companies with large spare capacities like Hanwha (3rd largest in the world now) and OCI would benefit as well. These companies have been hurt from Chinese low priced competition. They could use their non-Chinese manufacturing based to capture the European markets. The Taiwanese solar association president thinks that it is a 12 GW opportunity for his country if Europe imposes duties on 10 GW of Chinese solar cell imports.

The imminent threat of European duties have made some solar manufacturers flee the Chinese mainland. Taiwanese solar cell and module makers are now thinking of reversing the investment flows. Some companies like Motech and Del Solar which established factories in China to take advantage of the cheaper material and labor costs are planning to send the equipment back to Taiwan. This will help the companies escape the wrath of the western governments.

Digitimes

In the beginning of 2012, China exported around 10GW of products to Europe and 2GW to the US. If the trade war begins, such demand will have to be met by outsourcing production to firms outside of China, Liao stated. In addition, clients from other areas who have relied on China suppliers may also have to look for other alternatives, said Liao. This means, Taiwan may have an opportunity to receive 12GW of orders. As Taiwan’s current supply chain can only fulfill 8GW of demand, the trade war will cause undersupply, added Liao.