Today, discussion between the European Union and China resumed in Beijing. Gather high officials from all the concerned countries, every sides seem to aim for dialogue instead of the highly feared trade war after EU announcement on Chinese’s solar panel taxes few weeks ago. The ghost of a trade war between EU and China will be ineffective economically for both sides. Not long ago, the United State and China resolved their issue on the latter’s solar panels exportations to the US. The reasoning behind this argument should be an interesting case study for the European Union leaders.
China is the first producer of solar panels in the world as it owns about 65% of the world market. The country exports 90% of its productions and about 80% of them to Europe. Today, Chinese solar panels represent 80% of the European market whereas it was 63% 4 years ago. China monopoly on the EU solar panel market is almost complete and that is the main reason that lead European leaders to fight back with taxes. Indeed, the EU accuses China of dumping on their solar panels. Highly subsidized by their government, since the establishment of their new five-year plan, Chinese officials are giving priority to solar panels production. Therefore, own-state bank protect Chinese producers who are highly in debt mostly because they sell their products at a lower price than their costs. Chinese solar Panels’ prices went from $4/Wp in 2008 to $0.5/Wp and below in 2013.
An EU organization EU ProSun, consisting of European professional in the solar industry, is pointing out this dumping strategy from China. The organization accuses this dumping plan to be the direct cause of closing down and layoffs in over 30 European solar companies. Which led the European Union to open an investigation on Chinese solar panels in Europe.
In the United States, taxes Chinese solar panel were created in March and May 2012. Those taxes went from 24% to 250%. Therefore, Chinese solar panels importations to the US decrease dramatically starting March 2012. In December 2011, Chinese solar panels represented over $410 million in December 2012 it dropped to $20 million, which is a drop of 95%.
A year has passed since the US established those taxes. Prices from American and foreign solar panels are now stable or decrease a little. According to the Solar Energy Industries Association (SEIA), solar panels installation kept on increasing, Q3 2012 increase to +36% compared to Q3 2011, since the US government established taxation. SEIA also stated that employment in the solar business had a 13.2% growth in 2012.
In conclusion, we can say that despite a high taxation on Chinese solar panel, US solar industry kept on growing. Mostly due to a high number of competitors in the market and a fair competition. Of course, we can only have a short-term point of view on this subject. Only years can tell the ins and outs of that matter.