Higher solar duties risk “collapsing” Romanian PV market, says player

Tibby Barbu, vice president of Smart Solar Romania, reckons the enforcement of higher anti-dumping duties for Chinese solar panels would send more solar companies into bankruptcy and force them to relocate, warning the European PV market, including Romania, risks collapsing.

The European Commission (EC), the executive arm of the EU, and China have to reach an agreement before August 6, when the temporary duties of 11.8 percent will be lifted to an average of 47.6 percent for Chinese-made solar panels, cells and wafers, until December.

The EC says the fair value of a Chinese solar panel sold in Europe should be 88 percent higher than the price to which it is actually sold. It says the cheap panels hurt the “financial and operational performance of European producers”. EU members are expected to make a final decision on duties in December.

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What has been the pricing of Chinese solar panels since the enforcement of temporary duties by the EC?

As an experienced and reputable EPC company, Smart Energy Group has priority access to very competitive panel prices, due to its preferred customer status with all top suppliers in the world. Our best quotations for quality panels were below 40c/w and now the prices are hovering around the 54c/w mark and upwards.

Are the duties linked to the insolvencies of Gehrlicher Solar AG and Conergy, both solar companies that operate projects in Romania?

In case of the Gehrlicher Solar AG, almost certain and Conergy admitted that they could not absorb the additional tax and continue trading profitably. The COO and member of the Management Board, Richard von Hehn, explicitly attributes the insolvency directly to provisional anti-dumping duties for solar panels from China imposed by the European Commission. Also, Thorsten Preugschas, CEO of Soventix and Chairman of AFASE, said that this is a sad illustration of the devastating impact of punitive duties on the European solar industry.

Will more solar players go out of business if permanent duties are imposed?

If the European Commission does not change its position on the anti-dumping case, more solar companies will either go bankrupt or, at best, be forced to relocate their solar activities outside the EU, as Phoenix Solar just did. In this unfortunate scenario, a serious wave of job losses in this industry will materialize throughout the EU.  In my opinion, imposing anti-dumping duties makes no economic or political sense, at a time when solar energy is close to being a competitive source of energy, which generates many green jobs across Europe. Additional duties of 47 percent will certainly trigger a significant slowdown and a possible collapse of the PV industry in Romania, as well as the rest of Europe.  For us, business continuity will be seriously affected and will lead to a certain winding up of most projects under development or construction.

What is the current state of negotiations between China and EC?

From the latest media reports, I gather that the EU and China have, behind closed doors, negotiated an agreement on the ongoing trade dispute concerning the Chinese made solar panels. The negotiated agreement by the two sides is rumored to include a minimum price and volume caps for Chinese solar panels entering the EU market. We don’t know yet the real figures. But if this solution contains price increasing, this would lead to an unsustainable solution for European PV installers and project developers. Since the introduction of preliminary duties by the EU on 5 June, demand has already severely shrunk, leading to the insolvency of some prominent European companies.  The current situation of the market does not allow for any price increasing, on the contrary, the present trend is to continuously strive to deliver best quality PV parks at an ever decreasing overall price, in order to meet very strict investment criteria.

What is the risk that China will impose duties on European polysilicon makers, after enforcing them for imports from US and South Korea?

For the time being, I understand that China has refrained from imposing duties on European polysilicon makers, as an act of good will towards the European Commission, perhaps aiming for an equitable reciprocity.

A trade war with China may not be the best way ahead and the end tally will be a zero sum game.

Ovidiu Posirca