Solar trade tariffs released today in a preliminary ruling from the US government were much lower than expected and would disappoint petitioners trying to block cheap Chinese photovoltaic imports, said industry advocates.

The Department of Commerce announced its preliminary determination in the countervailing duty (CVD) investigation of imports of crystalline silicon photovoltaic cells from China, which was initiated last year at the request of SolarWorld Industries America, the largest PV manufacturer in the US.

The investigation covers silicon photovoltaic cells, modules, laminates, and panels, consisting of crystalline silicon photovoltaic cells. Thin film products were excluded.

Margins were set at between 2.9% and 4.73%. Under the ruling, Trina Solar’s imports would attract the largest duty of 4.73%, Suntech would attract a 2.9% duty and 3.59% for all other manufacturers’ products. Trina and Suntech were selected as “mandatory respondents” in the investigation because they are the two largest importers to the US.

Limited Impact on US Industry

But the tariffs were lower than expected and would have little impact on the US industry, said John Smirnow, vice-president of trade and competitiveness, at the Solar Energy Industries Association.

“I guess it’s good news because we don’t think it’s going to have significant impact on the US solar industry,” he said.

An additional preliminary determination on the alleged illegal dumping of solar products on the US market at artificially low prices thanks to Chinese government subsidies is expected on May 16.

In its petition to the US International Trade Association, SolarWorld alleged $40bn-worth of subsidies which had resulted in flood of cheap imports into the US and all but killed domestic manufacturing. Smirnow said that the lower than expected tariffs did not reflect the $40bn in subsidies from the Chinese government to the solar industry.

SolarWorld would be disappointed with the result, said Smirnow.

Mixed Emotions

But the Coalition for American Solar Manufacturing (CASM), which supports the SolarWorld challenge, welcomed the preliminary determination.

“Today’s announcement affirms what U.S. manufacturers have long known: Chinese manufacturers have received unfair and WTO-illegal subsidies,” said Steve Ostrenga, chief executive officer of Helios Solar Works in Milwaukee, Wisconsin, a founding manufacturer of CASM.

But the industry is divided over the SolarWorld challenge because low PV panel prices which had helped increase rates of installation to almost 1.9GW in the US last year.

The Coalition for Affordable Solar Energy (CASE) has consistently opposed SolarWorld’s position on the grounds that it would threaten up to 60,000 jobs in the US.

Jigar Shah, CASE president and founder of SunEdison, said: “Today’s preliminary determination by the Department of Commerce imposing low tariffs on imported solar cells and modules is a relatively positive outcome for the US solar industry and its 100,000 employees. However, tariffs large or small will hurt American jobs and prolong our world’s reliance on fossil fuels.”

Q.CELLS North America CEO Boris Schubert said the issue was much broader than panel prices. “Long-term financial sustainability and reliability of solar PV generation is measured not in dollars per Watt peak but cents per kW hour,” he said. “To build a 21st century energy infrastructure in a complex market like the United States, our industry needs to stay focused on providing reliable, predictable and sustainable energy solutions for utilities and other customers.”

Smirnow said that the ruling could potentially take the heat out of the trade dispute. But such challenges had increased as countries jostle for leading roles in the global renewable energy industry.

Room for Collaboration

“We’re seeing more trade conflict in the solar industry – there’s an active case in China where they are investigating 6 US state programs. There’s a trade dispute between Japan & EU against Canada because of its 60% local content requirement. EU and Indian producers are also asking their governments for an anti-dumping countervailing duty case.

“Many governments want this industry. They see the job creation value of solar and want to deal with sustainability and climate change. They want to be a part of that and want to build the whole supply chain within their country.

“When you have a variety of governments providing support for their industries, you’re creating an environment where there could be competitive advantages and disadvantages, especially when government resources are going into an industry the citizens want to make sure those resources are going into an industry within their country not another country.”

He said that the semi-conductor industry had encountered similar trade disputes during high-growth phases and it was likely that a global trade body for the solar industry could emerge as a forum to deal with cross-border issues.

SEIA was already working with the Chinese Renewable Energy Industries Association to try to set up a “diplomatic” service for the solar industry. They were collaborating on an initiative to be considered at the Asia Pacific Economic Cooperation summit in June.

“We’d really like to see the trade ministers adopt this idea. It doesn’t have to be a formal dialogue, it could be some recognition within APEC of creating some structure to get industry and governments together to start talking about trade and competitiveness issues in a proactive and collaborative fashion.”