EU OKs China PV spat resolution

EU heads of state have signed off on a deal brokered this summer regarding the importation of Chinese solar panels into Europe, giving the global PV industry a significant measure of certainty as it prepares for a new year.

The European Council has not only approved the “price undertaking” struck this summer by Brussels and Beijing in response to the EU’s anti-dumping investigation, but also agreed to sweep the parallel anti-subsidy investigation into the same deal.

The deal effectively puts a price floor beneath Chinese modules sold into Europe, as well as implementing an overall annual cap of 7GW on Chinese imports.

A set of highly punitive tariffs will be slapped on Chinese suppliers which do not sign up for the €0.56 ($0.76) per Watt price floor. However, as nearly 100 Chinese module exporters – including all the major tier-one players – have signed up for the arrangement, the tariffs will have little relevance.

The deal is “expected to stop the downward spiral of prices on solar panels”, the European Commission said in a press statement today.

The agreement lasts through December 2015, significantly shorter than the five-year norm for most EU anti-dumping measures.

Industry sources say the price floor, provisionally in place since August, has already had a big impact on the European module market.

In the past, lower-tier Chinese players “were able to distinguish themselves on price” alone, says Luc Graré, senior vice president at REC Solar.

Now, as they cannot undercut other suppliers on cost alone, including tier-one Chinese competitors, there is little motivation to buy their lower-quality modules.

“They have no chance any more to get into the [European] market,” said Graré, speaking last week to Recharge.

That has opened the door again to some Europe-based manufacturers, which had previously been priced out of the market. “That’s what we’ve seen over the last two or three months, that they are getting back in,” Graré says.

Others see a possible opening in the market for module suppliers based in other low-cost countries such as India.

Begun in September 2012, the European Commission’s anti-dumping investigation concluded that many Chinese suppliers were selling panels into Europe “far below” normal market prices. A separate investigation concluded that many had received subsidies considered illegal under international trade law.

Ultimately, however, Brussels was willing to meet Beijing more than halfway – inflaming many European PV manufacturers in doing so – as the PV trade row threatened to spill over into other unrelated industries.