Sizzling US tariffs may singe solar panel makers

A solar panel production line in Lianyungang, Jiangsu province. [Photo/China Daily]

The United States Department of Commerce is imposing higher tariffs on Chinese solar products imported to the US marketplace.

It had indicated that Chinese companies may be entitled to lower rates, but the decision announced on Wednesday to impose tariffs of 238.95 percent reversed that.

The department had conducted a review of whether Chinese solar manufacturing firms had received subsidies from the government between March 2012 and November 2013. Producers now face anti-dumping and anti-subsidy rates of about 31 percent on Chinese products.

The review and tariff rates are part of an ongoing trade dispute between the US and China that was initiated by SolarWorld AG, a Germany-owned US-based company that filed a petition accusing Chinese manufacturers of receiving subsidies from the government and dumping them in the US market. SolarWorld had said that firms from the Chinese mainland avoided duties by taking production of certain solar panel parts to Taiwan instead.

Philip Shen, senior research analyst at Roth Capital Parnters, said in a research note to clients that the duties were "much worse than expected"－and that this is overall a "negative for Chinese module vendors addressing the US market".

Since the rates apply retroactively, the new rates may be liabilities for companies who are already underwater and do not have options for improving their economics, Shen said.

Jigar Shah, president of the Coalition for Affordable Solar Energy who has been vocal about the tariffs being bad for the solar industry, said that the final determination was "another disappointing move" toward protectionism for the US solar industry.

"The Department of Commerce chose against lowering the tax on solar imports. Keeping these stiff tariffs in place makes solar power less affordable, slows job growth and prevents more American homes, businesses and utilities from switching to clean solar energy," Shah said in response to the review's results.

"Despite booming solar employment, economically counterproductive tariffs have artificially made solar panel prices in the US the most expensive in the world. This decision does nothing to correct this imbalance," he said.

Yingli Green Energy Holding Co Ltd, a solar panel manufacturer with headquarters in Baoding, Hebei province, received a lower tariff rate as a result of the review compared to the rate they had been paying in 2012 (21.73 percent versus 29.18 percent). The company said on Thursday that it is disappointed that the US is continuing its decision to place tariffs on the industry, but they are now "very securely positioned" to succeed in the US market.