Here Comes Another Solar Trade Dispute
By
Ucilia Wang, Contributing Editor
February 7, 2013 Trade complaints are nothing unusual, but they seem to have become more common in the world of solar these days. The U.S. Trade Representative Ron Kirk said Wednesday he's taking the first step toward lodging a World Trade Organization complaint against India for a policy that blocks some U.S. companies from a growing market. The national policy, launched in 2010, turned India into a potentially vast market for solar equipment makers around the world. The government set out to add 20 GW of grid-tied and 2 GW of off-grid solar energy generation by 2022. The plan generated a flood of excitement for solar manufacturers, but that euphoria was soon tempered by the rule that require project developers to use Indian-made silicon solar cells and panels. Developers who opt to use thin films, which are made with non-silicon compounds such as cadmium telluride, aren't restricted to use domestic products. The rule was bad news for many of the world's largest solar cell and panel makers, many of whom use silicon and are located in China, Japan, the U.S. and Germany. U.S. companies such as SunPower and Suniva are shut out. The rules did help one U.S. company, First Solar, who began announcing sales deals to Indian developers toward the end of 2010. The Arizona company isn't subject to the "domestic content" rule because it makes cadmium telluride solar panels. But that exemption may not last long. India is looking at adding non-silicon solar cells and panels to the domestic content requirement. The WTO complaint is the latest solar trade dispute to emerge. The growing number of trade complaints reflects this intense struggle by manufacturers to survive in the past two years. Supply has far outstripped demand, causing the prices of solar equipment to plummet and dozens of solar cell and panel makers to file for bankruptcy. Many of those who haven't done that have instead scaled back production and suspended plans to build more factories. Gaining a foothold in the next emerging market before others could do the same has become more critical than ever. The stakes for resolving trade complaints also have become higher. The solar market is growing, and with that comes profits and jobs. Protectionist policies can pop up any time, but they are more likely to gain public support during tough economic times. A group of glass makers recently filed an anti-dumping complaint with the European Commission against their Chinese rivals. Glass is typically used to cover and protect solar cells from the weather elements. Last year, a group of European solar cell and panel makers lodged a complaint against their Chinese competitors, contending that Chinese companies had received so much government subsidies that they were able to sell their products at below production costs. The U.S. government wrapped up its investigation of two trade complaints last November and sided with the group of manufacturers, headed by SolarWorld. The investigation found that the Chinese solar cell and panel makers were getting unfair subsidies from the Chinese government and had been selling them at less than their production costs or less than what they sell at home. The U.S. government have since imposed tariffs on imported Chinese solar cells. But some Chinese companies have managed to avoid the tariffs by buying solar cells from countries such as Taiwan. At the same time, the fact that Chinese companies can't or don't want to use their own cells for the U.S. market has forced them to reduce production or scramble to find buyers elsewhere. And that hasn't helped their bottom lines. The U.S. isn't alone in fighting India's domestic content rule. The European Union and Japan have criticized India's policy. WTO may be sympathetic to the U.S. than India. Last year, the trade organization ruled against some provisions of the domestic content rule from the Ontario province in Canada after receiving complaints from the European Union and Japan. But the Canadian government filed an appeal this week. Meanwhile, China said it, too, has a trade complaint to investigate. The government is looking into whether silicon producers are selling their products at below production costs. It will then decide whether to impose tariffs on those imported silicon, which mostly comes from the U.S., Korea and Europe. © Copyright 1999-2013 RenewableEnergyWorld.com - All rights reserved. http://www.renewableenergyworld.com |