The decision by the U.S. Department of Commerce to impose steep tariffs on solar cell imports from China and Taiwan has some industry groups crying foul and warning it may adversely affect consumers and businesses as prices rise.
The decision, handed down by the Commerce Department on Friday, is in response to China and Taiwan "dumping" massive numbers of inexpensive photovoltaic (PV) cells into the market over the past year.
Chinese PV products shipped to the U.S. were hit with "anti-dumping" tax rates ranging from 26.33% to 58.87%, while PV products from Taiwan will receive anti-dumping tariff rates of 27.59% to 44.18%.
"Enough is enough," Rhone Resch, CEO of the U.S.-based Solar Energy Industries Association (SEIA), wrote in a statement. "The Department of Commerce continues to rely on an overly broad scope [of] definition for subject imports from China, adversely impacting both American consumers and the vast majority of the U.S. solar industry."
Knowing the U.S. decision to raise tariffs was coming, many Chinese manufacturers increased shipments of solar panels to the U.S. in the first half of this year.
The total export to the U.S. by Chinese and Taiwanese manufacturers exceeded 2.3 gigawatts (GW) in the first half of the year. The solar industry measures shipments by watts of power the panels will generate.
Including the cumulated PV module capacity of U.S. manufacturers such as First Solar and SunPower, which is close to 4GW, the U.S. will have enough modules to achieve its target installation of 6GW this year, market research firm TrendForce predicted.
"Therefore, no matter what the U.S.-China anti-dumping preliminary verdict turns out to be... it will not have actual impacts on Chinese and Taiwanese manufacturers until next year," said Corrine Lin, an analyst at EnergyTrend, a subsidiary of Taiwan-based TrendForce.
Because the price of PV modules (the building blocks of solar panels) bottomed out last year, investors worldwide became concerned that profits would also drop. PV prices plummeted after China saturated the market with low-cost solar panel modules. The result was that PV capacity rose from 31 gigawatts (GW or a billion watts) in 2012 to a record 39 GW last year, even as investments in solar capacity dropped, according to a a 2014 report by analyst firm Bloomberg New Energy Finance.
The influx of cheaper PV cells from China and Taiwan has driven the price of solar wafers to about 40 cents per watt even before mid-June because Chinese manufacturers rushed their shipments to the U.S. ahead of time, according to TrendForce.
China not only uses cheaper labor than the U.S. to produce the panels, but also heavily subsidizes its PV industry. For example, in 2010, the U.S. Department of Energy estimated that the Chinese government provided its manufacturers with more than $30 billion in subsidies.
While it was not hit quite as hard as China, the tariffs on Taiwan are likely to cause that nation to lose many PV orders in the U.S. due to the higher prices, TrendForce said.
"Overall, it will be a huge challenge to relevant makers in the future," said Arthur Hsu, a research manager for EnergyTrend. "Manufacturers cannot absorb the extra [anti-dumping] tariffs simply through adjusting procurement or production processes."
The tariffs will specifically hurt Taiwan's high-efficiency products, since those are the only ones that have competitive advantages in the U.S., TrendForce stated in a news release. Among all of Taiwan's PV cell producers, Motech Industries had the highest tax rates imposed on it. As a result, Motech may reconsider shipments to the U.S., Hsu said.
Lucas Mearian covers consumer data storage, consumerization of IT, mobile device management, renewable energy, telematics/car tech and entertainment tech for Computerworld. Follow Lucas on Twitter at @lucasmearian or subscribe to Lucas's RSS feed. His e-mail address is email@example.com.
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This story, "Solar Power War Between U.S. and Asia Escalates" was originally published by Computerworld.