PwC questions PV tariff claims

Serious doubts have been raised by a new study about many of the key claims regarding potential negative impacts of EU tariffs on Chinese PV kit, whose implementation by Brussels now appears a near certainty.

The study – published by the consultancy PwC and commissioned by the pro-tariffs lobbying group EU ProSun – takes direct aim at a competing report which claimed such tariffs would cause massive job losses across the European solar sector.

That previous study, delivered to European trade officials in February, was conducted by the Switzerland-based consultancy Prognos and commissioned by the anti-duties lobbying group the Alliance for Affordable Solar Energy (AFASE).

The PwC study argues that the job losses predicted by Prognos seem “highly questionable” given the actual size of the European PV industry at present.

For example, Prognos predicted that as many as 85,000 jobs could be lost by 2015 in the event of a 60% tariff on Chinese PV components. However, PwC points out that the German environment ministry (BMU) has estimated that there were less than 88,000 PV-related jobs across Europe last year.

The potential demand shock described by Prognos in the event of duties also looks suspect to PwC.

In PwC's evaluation, Prognos has looked at the solar industry as if were “static”, without taking into account the natural flexibility built into any sector, or other factors such as the inevitable price reduction of complementary PV components.

Another key point from the PwC report is that many of the most dire predictions made about the US solar market before it imposed duties on Chinese cells later turned out to be severely overblown.

Last October the US Department of Commerce confirmed anti-dumping duties on Chinese cells ranging from 18% to 250%.

In the run-up to that decision an AFASE-like group in the US, known as the Coalition for Affordable Solar Energy (CASE), commissioned the Brattle Group consultancy to conduct a study on the potential employment impact.

Among other erroneous assumptions, the Brattle Group assumed the US would install 2.5GW of PV last year in the absence of tariffs – when in fact it installed 3.3GW with tariffs (or preliminary tariffs until October) in place.

Employment in the US solar sector grew strongly last year, contrary to the Brattle Group’s predictions.

One major difference between the EU and US case, however, is that the US duties cover only China-made cells – allowing Chinese manufacturers the relatively easy workaround of importing cells from Taiwan or other nearby countries – whereas European duties would be far more comprehensive.

The PwC report is only the latest salvo in the war of words between AFASE and EU ProSun, as the middle of the European PV supply chain – the makers of wafers, cells and modules – fights it out with those on the extreme ends of the supply chain – i.e. the polysilicon suppliers and developers.

Numerous reports have emerged this week purporting to confirm that Brussels will impose anti-dumping duties of up to 68% on Chinese PV kit when it makes its final ruling in early June.

Many in the European solar sector – to say nothing of the broader business community – still hope that Brussels and Beijing will find some more benign way of settling the issue.