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Taiwanese and Malaysian PV Companies Have Strong Case in EU’s Anti-Circumvention Probe, TrendForce Says

2 June 2015 Energy Corrine Lin

On May 29, the European Commission (EC), the executive body of the European Union (EU) released a list of the Taiwanese and Malaysian photovoltaic (PV) manufacturers that are being investigated for helping Chinese PV manufacturers to circumvent PV cell and module tariffs. This list contains approximately 80 companies between the two countries. 

The EC’s anti-circumvention probe is based on the reported violations made by the Chinese PV companies since China and the EU reached a deal on the trade of PV products, according to Corrine Lin, analyst for EnergyTrend, a division of TrendForce. Under this deal, Chinese PV imports to Europe are limited via minimum import price (MIP) and import volume agreements made with the respective Chinese manufacturers. Although the arrangement ended an earlier anti-dumping and countervailing review of PV imports by the EC, the Chinese manufacturers have been able to exploit the various loopholes in the MIP agreements and continue to disrupt the European solar market with low prices. One major loophole involves the Chinese PV manufacturers exporting near-finished products to third countries, where their partner companies complete assembling the products before passing them to Europe. Consequently, the Chinese PV exports to Europe are able to avoid the MIP agreements. With European PV companies still fighting for their survival, the EC is quickly bringing forth additional measures to reinforce the defense against Chinese competitors. The current anti-circumvention investigation, which mainly targets Taiwanese and Malaysian companies, intends to effectively stop unscrupulous third country PV manufacturers from sneaking Chinese PV products into Europe. 

“Under the MIP arrangement and taking euro’s depreciation into account, PV modules are sold at 0.56 euro per watt and PV cells at 0.28 euro per watt,” said Lin. “Even though the minimum prices for cells and modules are set quite high, Taiwanese products are being undercut in Europe. Hence, the MIP arrangement has many loopholes that are yet to be closed.”  

EnergyTrend’s statistics shows 20%~30% of Taiwan’s PV exports, both modules and cells, go to Europe and the majority of European exports are directly sold to clients. EnergyTrend further finds that Taiwanese PV companies will still be in an advantageous position Europe with regard to high-efficiency products since the region has been one of the major markets for this product type in the past. Moreover, the expensive electricity prices in the EU member states fuel the region’s demand for rooftop PV systems. 

Earlier this year, the EC ruled that Canadian Solar, ReneSola and ET Solar Group are excluded from the MIP framework, so they will have to pay high duties for the products they ship. EnergyTrend expects the EC will punish some Taiwanese and Malaysian PV companies with additional duties after the anti-circumvention probe but it will probably not impose tariffs on the entire industries of both nations. This assessment is based on the fact that there are very few European PV companies with manufacturing in their home countries, nor are there any strong evidence that many PV companies actually act as collaborators in China’s tariff evasion scheme. Thus, EnergyTrend asserts that this latest investigation will have no noticeable effect on the prices and the supply-demand situation of the PV market. 

The upcoming third quarter is the traditional peak season for PV installation in China and the United States. The stock-up demand in both countries are going to drive the market. Moreover, the high-efficiency cells will help create a price rebound along the supply chain. The demands in Europe, however, stays relatively weak due to the euro’s depreciation and the reduced feed-in tariffs given to PV power plants. The PV demand in the region is projected to be around 8.5GW this year, a slight increase compared with 2014. 

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