On Oct. 19, 2011, SolarWorld Industries America Inc., the largest U.S. producer of crystalline silicon photovoltaic (PV) products and a member of the Coalition for American Solar Manufacturing (CASM), filed antidumping and countervailing duty petitions with the U.S. Department of Commerce and the U.S. International Trade Commission (ITC) against Chinese crystalline solar cell and panel imports. In its petitions, SolarWorld estimated dumping margins in excess of 100 percent. SolarWorld is asking the government to grant relief to domestic producers by imposing duties to offset Chinese dumping and subsidies. The case excludes thin-film PV products and non-PV technologies such as solar thermal and concentrated solar.
The petitions assert that Chinese imports of crystalline silicon cells are being dumped into the U.S. market in dramatic proportions. In addition, the coalition has found that Chinese solar cell and panel producers receive a wide range of illegal subsidies from the Chinese government, including massive cash grants, discounted raw material inputs such as polysilicon and aluminum; heavily discounted land; power and water; multi-billion-dollar preferential loans and directed credit; tax exemptions, incentives and rebates; export assistance grants; export insurance at preferential rates. The U.S. Department of Energy estimates that the Chinese government at the national and provincial level provided Chinese manufacturers with more than $30 billion in subsidies in 2010. This includes at least $2 billion to one company, Suntech.
CASM is made up of seven U.S. manufacturers: SolarWorld (Hillsboro, Ore.), Helios Solar Works (Milwaukee, Wisc.), MX Solar USA (Somerset, N.J.) and four anonymous manufacturers. There are currently 213 associate members. CASM represents more than 17,000 U.S. workers.
China exports the vast majority of its solar products, and has a small domestic market. Chinese exports of crystalline silicon solar cells and panels to the United States rose more than 350 percent from 2008 to 2010.
The continued push of massive volumes of dumped Chinese cells and panels, along with growing margins of underselling at artificially and illegally low prices, ultimately caused market pricing in the United States to collapse in 2011 – with an average worldwide price decline of 40 percent – despite a growing market for these goods. The resulting price collapse has had a devastating impact on the U.S. solar cell and panel industry, resulting in shutdowns, layoffs and bankruptcies throughout the country. Over the past two years, 12 solar plants have shut down or downsized, eliminating more than 2,000 of U.S. solar manufacturing jobs in Arizona, California, Massachusetts, Maryland, New York, New Jersey, Pennsylvania and Wisconsin.
The wave of Chinese imports, combined with 20 percent declines in American exports of polysilicon and machinery, led to a major turnaround in the United States trade position with China in solar. In 2010, the United States managed to hold on to a small solar trade surplus with China of less than $500 million. However, in 2011, the United States had a $1.6 billion trade deficit with China.
Interestingly, China does not have a production cost advantage – labor accounts for only 10 percent of solar panel production costs. In fact, an analysis by the National Renewable Energy Laboratory found that Chinese manufacturers have only a 1-2 percent cost advantage over American manufacturers. When shipping costs are added, Chinese manufacturers operate at a 5 percent cost disadvantage. As a result, CASM believes this pricing is impossible without illegal subsidization and dumping.
The Case So Far
For purposes of federal investigations, dumping occurs when a foreign company sells a product in the United States at less than fair value. For purposes of subsidy investigations, subsidies are financial assistance from foreign governments to foreign manufacturers that unfairly benefits the production, manufacture or exportation of goods in that country. The investigation is expected to take between 11 and 13 months. Key dates in the investigation: