IN DEPTH: Intersolar sees tariff fallout

Companies working in the downstream side of Europe’s solar industry are struggling to find ways to react to price hikes for PV modules in the wake of EU anti-dumping tariffs.

German system integrator Belectric today said punitive duties are the wrong way to reach cost reduction in solar power. As an immediate measure, the company said it has secured a special contingent of thin-film modules from First Solar, as those aren’t subject to import duties announced by the European Commission against Chinese PV kit.

“Through import tariffs, solar electricity is becoming more expensive at the expense of power consumers. That’s the wrong signal to the German solar industry,” Belectric says in a statement.

“Even if all PV modules are imported, up to 80% of the added-value in free-field solar plants built today in Germany is done regionally. Consequently, the argument of the supporters of tariffs that duties secure jobs in Germany doesn’t hold.”

The exact contrary is the case, Belectric argues. With the imposition of punitive duties, module prices automatically rise – leading to a cost increase in PV systems.

“That endangers the competitiveness, and thus employment, in the areas of project development, installation and EPC,” the company says.

Earlier, renewables developer Juwi said the announcement of duties – in combination with cuts to PV incentives last year – means it will install less than 10MW of PV capacity in Germany this year, compared to about 100MW in 2012.

“With protective tariffs PV installations can’t be built profitably any longer in Germany and many other European countries,” Christian Hinsch, Juwi’s head of public affairs told Recharge, adding that the measure counters efforts to expand PV to become a cheap building-stone of the energy supply in German and Europe.

Sparks were flying at a discussion on the tariff issue today at the Intersolar trade fair in Munich.

Milan Nitzschke, head of the lobby group EU ProSun and vice president of embattled German PV module maker SolarWorld, argued that Chinese overcapacities backed by state financing as well as sales prices far below production costs had already led to 60 bankruptcies among PV manufacturers across Europe, costing the jobs of 50,000 people.

“In the end, there will be a Chinese monopoly,” Nitzschke warned. “And if you see that companies – state-driven – decrease prices (and) can dictate prices going down too much, you can believe me in the end they can dictate them going up again.”

Nitzschke claimed the current five-year plan of China’s government after solar modules also aims at boosting the country’s solar equipment industry. Too-cheap prices through indiscriminate state financing of any solar companies have also hurt major Chinese producers, he argued.

“I guess (Chinese PV maker) Suntech would have been very happy if they could have sold their products profitably on the market. But the Chinese government was against that. They financed an overcapacity.”

Jerry Stokes, a former head of Suntech for Europe and now the CEO of Norway-based Innotech Solar, countered that climate protection shouldn’t be left out in the discussion, and that cheap modules through competition from China have actually helped European government to move toward meeting their 2020 climate targets.

“They’ve benefitted massively from the reduction in costs,” Stokes claimed. “They’re now backed into a corner, because if duties are applied, prices go up, volumes go down, and they’re further away from meeting their national targets.”

Insisting on anti-dumping tariffs of around 50% would also counter the aim of reaching grid parity in PV, cautions Peter Desmet, managing director of Solar Clarity, a Dutch distributor of PV products.

“ It’s going to keep us at the leash of the feed-in tariffs in Europe, it’s going to keep us depending on our drug dealers, and it’s not going to help us stand on our own feet,” Desment warns.