Duty-stung Chinese 'pivot to Japan'

Chinese and Taiwanese PV suppliers stung by a new round preliminary US duties will begin targeting Japan more aggressively, predicts SunPower’s chief executive, with potentially significant consequences for existing players in that market.

It remains to be seen how Chinese and Taiwanese module suppliers respond to the preliminary US countervailing and anti-dumping duties announced in recent weeks, or indeed whether the duties will be finalised.

Most major China-based manufacturers have expressed their intention to find a way to remain a significant supplier in the US, with Trina Solar going so far as to say it anticipates sales growth in spite of any tariffs. But if the preliminary US tariffs are kept intact, an erosion of market share and margin may be in the cards for many Chinese players in the US.

In response, some industry observers believe that Chinese suppliers may pivot towards Japan more strongly.

“We do expect that to happen,” SunPower chief executive Tom Werner told analysts yesterday.

SunPower, which commands a roughly 10% market share in the high-margin Japanese market, and has a fruitful distribution partnership with Toshiba, is in a strong position to weather this ramped-up competition, Werner claims.

SunPower’s high-efficiency modules “fit so well [in the Japanese market] that we’re to a degree insulated to increasing competition”, Werner says.

If anything, increased attention from Chinese suppliers would seem to hold the most threat for domestic Japanese suppliers – some of which currently do a roaring business in selling China-made modules under their own brand names.

Japanese consumers are notoriously sceptical about Chinese products.

Kyocera, seen by some as having the most competitive in-house c-Si modules of any Japanese manufacturer, reported Thursday that its net income fell in the most recent quarter – due in part to falling PV module prices.

Sharp, the world’s largest module supplier in the first quarter of 2014 thanks to its market position in Japan, said Friday that it has seen a “significant” decline in module sales in the Japanese residential market over the past few months.

Sharp has pulled back sharply from overseas solar markets, including divesting its stake in the 3Sun manufacturing joint venture it had with Enel Green Power in Italy, and shutting a long-standing factory in the UK.

However, other Japanese players are more outward looking. Solar Frontier, the world’s first gigawatt-scale maker of CIGS thin-film modules, is currently deciding where to site its first overseas factory – with the US and the Middle East on the short list.