Pressured by the manufacturers, the European Commission decided in 2013 to impose a protectionist measure against the Chinese panels. After five years, the homogenisation of world prices and the weak response of European industry, which has hardly increased despite efforts to protect production in the EU, has turned the situation around.
For a few days, Europe has reopened its doors to these components. The Commission has decided that there are no longer reasons to continue maintaining the blockade: prices, manufacturing and quality do not justify the measure. With this development, the fear of “trade war” for solar energy that has been hanging over Europe since 2013 has dissipated, which could have important consequences within the European energy sector.
This is how Europe has lifted the blockade on the Chinese panels
In 2010, China surprised the world with an incredible capacity to manufacture solar panels. In 2011, the country’s production capacity reached 50,000 megawatts, much more than its European or American competitors. Manufacturers around the world began to worry.
Since the beginning of its race to master solar energy, China has exported a lot of technology. Huge production capacity and Chinese prices threatened European industry in 2010. While in Asia the costs were around 8-10 cents per KWh, in Europe (and the United States) production costs were about 18-20 cents of a US dollar per Kwh. These figures indicate the cost of the investment, taking into account the production according to the cost since normally we do not just buy a solar panel, but the complete installation.
Anti-dumping measure: fear of manufacturers and operators
In particular, the European anti-dumping measure emerged as a result of the fear of manufacturers and operators.
In 2012, the group ProSun, the most important group of European manufacturers, started an investigation of unfair trade due to the prices of Chinese panels sold in Europe. The report concluded that China was benefiting from subsidies, earning some 21billion euros at the expense of European producers.
The report was brought before the Commission in 2013, which imposed an anti-dumping measure. A country is considered to be dumping when it begins to sell a product in another country at a lower price than its production costs. This type of protectionist measure is intended to ensure the ecosystem of production, distribution and sale around said product, protecting the parties involved.
This measure, put on a temporary basis for two years, was renewed in March 2017 for another 18 months. During this time, special tariffs were imposed on panels from China or their entry was denied directly.
When the quality of the Chinese panels is in question.
Another complaint related to panels from China is their efficiency. Although it is true that at first there were many cheap but less efficient panels, which contributed to their acquiring a bad reputation, time has allowed them to improve in quality.
The efficiency of a solar panel is everything, and its capacity depends enormously on its manufacture. This also affects the investment. Several analyses show that the initial investment is much more profitable in the long run if it means higher quality panels, rather than a low-cost strategy. This argument served to cement the complaint against Chinese panels. Thus, European manufacturers accused China of selling very cheap panels whose installation was not fully profitable.
The efficiency of a solar panel
Today, the efficiency of a solar panel depends on many aspects: for example, its poly or monocrystalline construction, the quality of the materials used, the construction of the panel Although there are still low-quality (and low-efficiency) panels, Chinese companies seem to have positioned themselves very well in the market.
In fact, many companies of different origin (European, American or even Oceania) have their production bases in China. In addition, the largest producers and exporters of solar panels are Chinese: Trina, SunPower and Yingli Solar. In short, currently we cannot say that there is a correlation between quality and origin of solar panels, which has helped to homogenise the market.
The end of the war for solar energy
On September[dd1] 3, the European Commission decided that it does not make sense to continue maintaining the anti-dumping measure. This means that imported panels are no longer taxed with additional tariffs, provided that European prices are respected.
The main reasons are two: the first is, precisely, that the market has been evening out in prices worldwide. Currently, the price of the installation has fallen, while consumer prices have increased. These range between 25-51 dollar cents per KWh.
The second reason is that during this time, European production of solar panels did not increase noticeably despite the protectionist measure, so it does not seem to have had a significant impact on European industry.
This may be due to the fact that many European companies have their production sites in China. On the other hand, groups with protectionist interests, such as ProSun Glass, complain about this measure, citing, for example, that it will cause the de-industrialisation of European companies, or that the production of solar panels in China is much more polluting than in Europe.
What consequences will the end of this measure have?
The immediate consequence will be cheaper and greater availability of solar components in Europe. This measure seeks, in the long run, the reduction of the costs of producing solar energy, something for which Europe has been fighting for decades, especially since the conclusion of the Paris Agreement, the COP21.
At a global level, this measure could put further pressure on panel prices, which continue to fall. This is bad news for the industry itself, but it could be good news for consumers and operators, as it will expand the supply of services associated with solar energy.