A May 29 report claims that shipments of solar products from China to the U.S. may fall by up to 75 percent in 2012 if the U.S. imposes the recently proposed stiff import tariffs.
According to the iSuppli PV Perspectives report from IHS Inc., the reduction in Chinese imports could lower the total solar imports to the continent by 45 percent. Estimates put Chinese solar imports at 2GW; this value could fall to 1.5 GW with tariffs in place.
“The Commerce Department action will have a major impact on the North American solar market, constraining supplies and driving up prices for modules and systems,” said Mike Sheppard, photovoltaics analyst with IHS.
“Even when alternative supply lines are adopted, the penalties are likely to add as much as 12 percent to the cost of solar modules, lowering the average return on investment (ROI) for solar systems in the region by as much as 2.5 percent.”
The determinations by the Department of Commerce are only preliminary and will be finalized by November. Thus far, Commerce has proposed antidumping duties of 31 percent for about 60 firms, and 250 percent for all other Chinese exporters. The Department also found that illegal subsidies warranted import duties of 2.9 to 4.7 percent.
IHS notes, however, that the tariffs would only apply to Chinese-made solar cells. Therefore, solar panels assembled in China from foreign-made cells would not be subject to the penalties.
“The Commerce Department statement means that many Chinese cell manufacturers will be incentivized to outsource to third-party companies in other countries in order to get around the duties,” Sheppard said.
According to China Daily, some Chinese firms have been exploring this option. For example, Suntech has been fitting modules for export to the U.S. with solar cells made outside of China (mainly in Taiwan). The newspaper reports that Trina Solar and Canadian Solar have followed suit.
Although this strategy will increase the price of Chinese solar panels – with solar cells costing about 10 percent more in Taiwan than in China – some Chinese panel producers have hope that they can stay competitive by avoiding the tariffs.
IHS predicts that outsourcing cell production to Taiwan could increase the cost of installation for a ground solar system to $2.65 per watt, up from $2.56 per watt.