U.S./China Trade Dispute

In October 2011, SolarWorld and six other unnamed U.S. solar manufacturers formed the Coalition of American Solar Manufacturers (CASM) and filed an official claim with the U.S. Department of Commerce and the International Trade Commission (ITC) claiming that China was dumping PV modules in the United States and providing unfair subsidies to its solar industries. A preliminary conclusion in December by the ITC said it had found a “reasonable indication that a U.S. industry is materially injured” by PV modules from China “that are allegedly subsidized and sold in the United States at less than fair value.”

The next step will investigate whether or not to take action, which could include providing compensation measures and imposing protective tariffs on Chinese modules. According to the U.S. Commerce Department, these tariffs could be anywhere from 50% to 250%. The deadline for a preliminary decision (as of the end of January) is set for March 27, 2012.

Greentech Media’s Solar Power Year in Review 2011 says that “it’s no surprise that the cheapest modules are being installed in larger quantities than more expensive, domestically produced products.” Although the graph only depicts California, additional analysis—including data from other major state markets—shows that Chinese products accounted for 41% of all U.S. residential and commercial installations. In comparison, about 20% of modules installed in United States during that same time were American-made. The review also states that “the percentage of Chinese modules used in U.S. installations is projected to grow in the first quarter of 2012 as Chinese manufacturers aggressively move product into the United States to avoid potential tariffs and help developers complete projects at pre-tariff price points.”

Much of the PV industry is divided over the trade dispute. Many fear that imposing tariffs will negatively impact the viability of future PV projects, stalling the momentum of the industry. A counter-CASM group—the Coalition for Affordable Solar Energy (CASE)—has formed and is comprised of other solar businesses, including several large PV integrators, balance-of-system (BOS) component manufacturers, retailers, and module manufacturers (including some based in China). CASE contends that the solar project development industry and the silicon manufacturing industry could lose even more jobs if CASM’s actions result in tariffs against Chinese modules. See “The Circuit: News & Notes” in this issue for more information on the U.S.-China trade dispute.