Yingli exec: China giants would move

China’s largest PV manufacturers will rapidly shift production overseas if the US sticks to its guns on trade tariffs, predicts a vice president and trade lawyer at Yingli, the world’s largest module maker.

Len Conapinski, vice president and general counsel for Yingli Green Energy Americas, acknowledges the pain that many US buyers of modules are feeling at the moment.

“If you have a shovel-ready project in the United States right now, and you need [modules] with a price that starts with a 6 [meaning between $0.60-$0.69/W], then you’re not in a good situation.”

But speaking more broadly, Conapinski takes an optimistic view of where the trade wars that have roiled the global PV industry over the past few years have got to, saying they are “in their 8th inning”.

“Things look very bright for [the industry] on the trade front,” Conapinski said on Wednesday, just two weeks before the US is due to issue preliminary anti-dumping tariffs on PV kit made in China and Taiwan.

These trade issues “will go away”, he says.

Conapinski regards a settlement between the US and China before the new tariffs are finalised as “a definite possibility”. Such a settlement would be virtually guaranteed to raise module prices in the US in the short run, although probably not as much as the full tariffs would.

Yet regardless of the outcome of the trade ruling, he believes that geographic diversification is coming to the upstream PV sector, which has come to be dominated by China and Taiwan.

“We’re going to have much less geographic concentration in manufacturing. How quickly that happens will depend on some of these tariff rates. But it will happen.”

Conapinski did not speak to Yingli’s specific plans in the event the US tariffs are finalised.

Speaking separately on Wednesday – and not in response to Conapinski’s comments – Tim Larrison, vice president for finance at Yingli Green Energy Americas, revealed that the company dabbled in contract manufacturing in Mexico and Canada in the past year, and has “looked very carefully” at manufacturing in the US. 

Larrison notes that it would take investments “well into the hundreds of millions or billions” of US dollars to build factories capable of competing on price with those the company owns in China.

But Conapinski points out that any price increases that would come with overseas manufacturing would be at least partially offset by the smoothing out of the enormous volatility currently buffeting the market.

“Next time a trade case comes out – say [there are accusations] that the Poles are undercutting on price, or the Mexicans, or the Malaysians – then each bullet, each petition that gets filed, is going to have less and less of an effect as you get that diversified manufacturing base.”

“In terms of the trade, it will only get better from here,” he says.