EC’s Proposed Chinese Solar Panel Tax Angers AFASE

The European Commission’s (EC) proposed anti-dumping tax on imports of cheap solar panels from China has met with stiff opposition from the European industry body, the Alliance For Affordable Solar Energy (AFASE).

In an open letter (PDF) to EC Trade Commissioner Karel De Gucht, signatories from over 1000 solar companies express concern that increased import duties on Chinese photovoltaic materials would hamper the growth of solar energy in the EU and potentially result in a failure to meet renewable energy targets.

They argue the current global oversupply of panels out of China was an outcome of years of generous feed-in tariff arrangements in many countries, causing a boom in the photovoltaic production industry, particularly in China. However, factors such as the global financial crisis meant subsidies were scaled back or cut entirely, creating the current vacuum in demand, resulting in a bust cycle in Europe.

In the letter, AFASE members say the European solar power industry “will exit from the current bust cycle by continued cost-cutting through cost rationalizations and economies of scale, thereby sustaining and increasing demand.”

The proposed 47 percent anti-dumping tax (reported elsewhere to be between 37.2% and 67.9%), while ostensibly assisting European solar manufacturers, would not arrest this ‘stagnation of demand’, which the European Photovoltaic Industry Association (EPIA) expects will continue throughout the EU until 2015.

Under the tax, the signatories assert, the cost of solar power installations will rise and EU manufacturers will miss out as solar panels are sourced from other producing countries such as Korea, Japan, Taiwan or the USA. REC solar panels, for example, are produced in Singapore.

More likely, AFASE says, is the increased cost of Chinese PV will lead to a decrease in demand for solar power across the EU, with investors shying away from what was once considered a good cost-benefit proposition.

“Tariffs on solar products and their components are bad for the entire European solar industry since they would lead to price increases and significantly dampen demand,” said Wouter Vermeersch, AFASE signatory and CEO of Belgian company Cleantec Trade.