US anti-dumping ruling recently change PV Industry Development in the world by David W. S. Liu－活得精采，劉偉澍的學習網站

US anti-dumping ruling recently change PV Industry Development in the world

by David W. S. Liu associate professor of NTPU National Taipei University

According to a recent report from Worldwatch, the power generated from solar energy is about 1/3 of all renewable energy sources. There are several countries such as Australia, Brazil, Demark, Italy and Germany, where the cost per watt from solar energy is lower than traditional power plants now. Germany’s Energy Consulting Committee claimed that 25% of electric power will come from solar energy by year 2050, while the Australian government projected by 2040, solar energy will be the lowest cost clean energy in the world. UN IPCC (Intergovernmental Panel on Climate Change) published on April 13, 2014 urging all countries in the world to use renewable energy especially solar energy to slow down global warming.

PV Industry Present Status

The solar industry continues to grow at a 20% to 30% growth rate every year. The 2014 forecast is about 41 GW of which China and Europe make up around 10 GW, while US, Japan and the rest of the world contribute about 7 GW, for details please refer to following table.

From following the SOLAREX global map, China is projected to add 10 to 13 GW in 2014 and will be the largest PV market in the world, while the European market at 10 GW ranks second, Japanese solar energy use is growing very fast and is projected to be larger than 7 GW in this year, ranking the third while the US market will be less than 7 GW, or fourth in the world.

Over Supply in 2011, 2012 & 2013 Last Three Years

As you can see from the capacity data below, the PV industry supply chain from upper stream poly and wafer to lower stream of cell and module are experiencing over capacity. The whole world demand is around 40 GW, while poly capacity is 80 GW, wafer and cell capacity is 60 GW and module capacity is 70 GW. The over-capacity mainly comes from China; China’s capacity alone can supply the whole world market demand.

The over-supply situation lasted for three years from 2011, 2012 to 2013. The whole supply chain market selling price dropped dramatically during this period of time. All manufacturers are losing money. The over-supply situation will improve in 2014 and hopefully supply/demand will be balanced in the year of 2015 if there is no more new capacity added to the present market.

What is the role of Taiwanese Manufacturer

In the whole supply chain, Taiwanese cell manufacturers play an important role in the world. Cells made in Taiwan are known for high quality, competitive prices and are export to the European market, Japanese market and US market. Taiwanese solar cell manufacturers are leaders in high efficiency, low breakage and much better quality compared with cells made in China. China’s so called vertical integration manufacturers use Taiwanese cells assembled with modules and exported to both the US market as well as European market. US and EU solar energy systems installed should thank to high quality cell made in Taiwan. In the whole industry, Taiwanese manufacturers maintain vital link and a balanced relationship among competitive chain of the U.S. Europe and China (see graph below from ITRI IEK).

US anti-dumping ruling changed the whole picture

In addition to the anti-dumping tax on PRC China, recently the US government announced an anti-dumping tax penalty on Taiwanese cell manufacturers as well by adding a 20% to 27% import duty penalty. By doing that, Taiwanese cells or modules using MIT cell need to add 20% to 27% anti-dumping tax and have become not cost competitive in the US market. The US market module ASP average selling price increased from 66 cents per watt to 75 cents per watt. By doing that, the US PV industry suffered a much higher market price or a 15% market price increase which definitely will harm the US PV industry’s development in the future and which is also not good for clean energy development in the US as well.

It is projected that for the US PV industry volume of 7 GW this year, the US local market can only supply 2.3 GW and 4.7 GW still needs to be imported from the overseas market. While there is no sufficient capacity outside of China and Taiwan (only a small capacity left in South Korea, Malaysia and REC Singapore for their own use). Eventually the US still needs to import cells/modules from China or Taiwan but these were pushed to a much higher market price by adding a 20% to 27% duty penalty.

Footnote: (US market demand 7 GW – US local supply 2.3 GW = 4.7 GW – imports from China 2.3 GW in the first half of 2014 = 2.4 GW left for the 2^nd half of 2014.)

The Taiwanese cell manufacturers became the scapegoat by adding a 20% to 27% anti-dumpling tax penalty. Taiwanese manufacturers have no choice but to diversify their export market or eventually give-up the US market (US customers will no longer enjoy the high quality solar cells from MIT, the consumer is the loser). PRC China eventually becomes the winner with its low quality products but still competitive price to grab the US market.

US system developers such as SunEdison (MEMC) became the scapegoat as well. All projects developed by using MIT cells are now subject to a 20% to 27% duty penalty and all projects have become not financially viable. China started the PV trade war against the US by stopping US Hemlock poly exports to China and planning to boycott US Dupont (PV paste producer) business in China.

While I visited the USA and met with USTR government officers in the past, US government used to be a strong supporter of free trade and changed it to fair trade now. Taiwan is the scapegoat between the US and PRC China, however, no matter whether under WTO in the past or TPP (The Trans-Pacific Partnership) now,this PV trade war will continue and nobody will be the winner in the end.

David W. S. Liu

劉偉澍，朋友都叫他 David ，昱晶能源科技副總經理，昱鼎能源董事，中華民國企業經理協進會前秘書長、現任理事，商業智庫首席顧問，EMBA班主任，前中鼎工程監察人，前中美晶監察人，前品爵汽車董事，前福特六和汽車公司財務長兼Mazda汽車與Jaguar汽車副總經理，同時任教于國立臺北大學商學院，教授企業管理、國際貿易等課程，並常受邀在工商企業界作專題演講。曾榮獲中華民國國家傑出經理人，國家管理獎章。著有1.「臺灣汽車工業發展文集」，2. 「Travel 趴趴走 David 帶你環遊世界，行遍天下」，3. 「活得精彩，做好個人管理」，4. 「管理技能實務 - 核心職能 Core Competency 大學用書」四書。