Bloomberg News

SolarWorld Trade Dispute With China Divides U.S. Solar Industry

October 21, 2011

Oct. 21 (Bloomberg) -- A trade complaint seeking to protect U.S. solar-panel makers from unfair competition from China may harm other parts of the U.S. solar industry, project developers said.

The complaint filed Oct. 19 by the U.S. unit of Bonn-based SolarWorld AG and six other panel companies asked the government to impose duties on more than $1 billion of Chinese imports.

The action may drive up prices for U.S. companies that purchase solar panels and slow the installation of renewable energy systems, said Arno Harris, chief executive officer of Recurrent Energy, the San Francisco-based project development unit of Sharp Corp. Solyndra LLC, the failed panel company that received a $535 million U.S. Energy Department loan guarantee, cited cheap Chinese products in its September bankruptcy filing.

“You have a group of manufacturers whose product is not competitive and they’re turning to trade mechanisms,” Harris said in an interview yesterday. The dispute may hinder U.S. consumers’ use of solar power, and “is fundamentally a mistake.”

The complaint filed with the International Trade Commission alleges that Chinese companies have sold solar panels below cost. China produced 55 percent of the world’s panels in 2010, according to Bloomberg New Energy Finance.

The dispute serves the interests of U.S. manufacturers, not other companies in the solar industry, Harris said. “It’s a bit ‘the pot calling kettle black’ here,” he said. “If their complaint was valid, you’d see Chinese companies benefiting. In fact they are suffering as well.”

China’s ‘Positive Role’

Nor will it help companies build solar projects, said Carlos Domenech, president of SunEdison, the development unit of St. Peters, Missouri-based MEMC Materials Inc.

“I think China is playing a positive role in lowering panel costs for U.S. consumers,” he said yesterday in an interview at the Solar Power International conference in Dallas. “Reducing the cost of panels also helps create green jobs in the U.S.”

The dispute is “a matter of manufacturer versus manufacturer and it’s not the whole industry,” Rhone Resch, chief executive officer of the Solar Energy Industries Association, said in an interview.

He said the Washington-based trade group hasn’t taken a position on the trade fight. “We’re not involved so our role is only to keep people informed of what develops.”

The U.S. exported more solar products last year than it imported, by $1.9 billion, according to an August report from SEIA and GTM Research. Polysilicon, the raw material in solar cells, and manufacturing equipment made up the majority of the $5.63 billion in exports, and much of that went to China. The U.S. imported $2.4 billion in solar panels.

Falling Panel Prices

Cuts in incentives in Europe and large increases in production drove down solar-panel prices more than 40 percent this year, breaching the $1-a-watt milestone this month, Aaron Chew, an analyst at Maxim Group, said in a research note yesterday.

SolarWorld is part of the newly formed Coalition for American Solar Manufacturing, whose six other members are also petitioners in the ITC complaint. The company’s SolarWorld Industries America Inc. unit received an $82.2 million clean energy manufacturing tax credit to expand a plant in Hillsboro, Oregon, in January 2010.

The six companies haven’t been identified. “It is not uncommon that companies will support a case and have their identity remain confidential,” Adam Gordon, a partner at Wiley Rein LLP, which filed the petition for SolarWorld, said in an interview.

“This petition is supported by a significant majority of the U.S. industry,” Gordon said, which the petition defines as “the domestic industry producing crystalline silicon photovoltaic cells and modules.”

Suntech Power Holdings Co., the world’s largest solar panel maker, is reviewing the complaint. “Anyone can file one of these actions,” the Wuxi, China-based company said yesterday in a statement. “We are confident in our position and well- prepared to substantiate our strict adherence to fair international trade practices.”

--With assistance from Zachary Tracer in New York. Editors: Will Wade, Charles Siler

To contact the reporters on this story: Ehren Goossens in New York at egoossens1@bloomberg.net; Christopher Martin in New York at cmartin11@bloomberg.net

To contact the editor responsible for this story: Reed Landberg at landberg@bloomberg.net


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