This week in solar, the industry was abuzz with reaction to the Department of Commerce's final ruling on countervailing and anti-dumping duties on solar cells from China. Companies that manufacture in China don't seem to be happy, the industry continues to debate whether the tariffs are healthy, and in the end most analysts think tariffs don't really change the game at all.
What's going on?
In May, the U.S. Department of Commerce announced preliminary anti-dumping and countervailing duties on Chinese manufacturers (for a review of the case, click here). The ruling this week was a finalized version of these tariffs and made some modifications and clarifications.
First, the ruling changed the duties slightly in favor of Trina Solar (NYSE: TSL) and against Suntech Power (STP +0.00%). Here's a look at the total (including anti-dumping and countervailing duties) tariff in May and the final ruling.
|
Total Preliminary Tariff |
Total Final Tariff | |
|---|---|---|
|
Trina Solar |
35.87% |
23.75% |
|
Suntech Power |
34.12% |
35.97% |
|
Participating Companies |
34.79% |
30.66% |
|
Non-Participants |
253.57% |
254.66% |
Source: GTM Research
Trina Solar's rate was reduced and Suntech's rate was increased slightly. For "participating companies," which catches most other manufacturers, the rate was dropped by more than 4% to 30.66%.
The final ruling did conclude that module assembly would not be included in the tariff, an important factor for Chinese solar companies. This will allow them to move cell production to another country and still assemble modules in China, a way of getting around the tariffs.
Most Chinese companies released statements that were unsatisfied but relieved that the scope of the tariff wasn't expanded. JA Solar (NASDAQ: JASO), LDK Solar (NYSE: LDK), and Yingli Green Energy (NYSE: YGE) all released statements subtly pointing out that they would be able to get around the tariffs and were committed to the U.S. market. They don't seem to think this is a death blow by any means.
This is another step toward making the tariffs official, but the International Trade Commission will get a final say next month.
This may seem like a positive for U.S. companies, but the ruling has much more complicated implications. Industry observers don't believe the tariffs are constructive and think there are better ways to deal with subsidies that are given to solar companies on both sides of the Pacific Ocean.
Solar Energy Industries Association President and CEO Rhone Resch said, "This week, SEIA, other trade groups, and multinational companies joined forces to call for mutually beneficial, long-term trade solutions through the World Economic Forum's Green Growth Action Alliance." For now, a trade war in solar is brewing.
News and notes for the week
Here are some of the more company-specific notes for the week.
- Renesola (SOL +0.00%) launched its Virtus II solar module and Micro Inverter Replus at the All Energy Australia 2012 conference. The Virtus II Plus 250 is a second-generation module that provides 250 watts of power after initial decay and is guaranteed to generate 92% of initial power after 10 years.
- Suntech announced more details of its strategy to stay in business. It is investing in innovation, reducing capacity, and focusing on cost cuts in both production and operations. The company is also exploring ways to extend the maturity of its debt and reduce its overall debt level. Tackling debt will be a key to Suntech, especially since convertible notes come due in March.
- Suntech also announced this week that it will supply 39 MW of modules for four projects in Romania. The projects will be completed by early 2013.
- Canadian Solar (CSIQ 11.18%) announced that it will supply 20 MW of solar modules to REDSET, an Australian solar distributor.
That's all for this week in solar.
