May 25, 2019 | 04:30 AM


03.06.2013On Solar Wars, Even Germany Pro-China

Germany used to be the world's leading solar panel maker.

Kenneth Rapoza, Forbes.com

It was German solar giant SolarWorld that first complained about its Chinese competitors selling photovoltaic equipment below market prices in Europe. And with good reason.

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Germany used to be the world’s leading solar panel maker. In 2004, they had 63% of the world’s revenue in photovoltaic panels. By 2010, they slipped all the way down to 18% while China rose to 50%.  China has simply taken over, and not only in Europe.

In one famous case in Massachusetts, bankrupt Evergreen Solar shut down production to move to China, even after getting state subsidized loans to help them stay afloat.

China has runaway with the global solar panel market and, in Germany at least, SolarWorld wants some of it back.

They convinced the European Commission to bring the 18 member states to a vote to decide whether China was “dumping” below market priced solar panels into Europe in order to maintain or increase market share.

But, oh, the irony.

According to China Daily, German officials at the Commission are voting against higher tariffs, as much as 60%, on Chinese solar panel manufacturers.  The vote was conducted on Friday.  Among the “no vote” on tariffs includes Belgium, the home country to E.U. ProSun, the trade group that joined SolarWorld to lobby the Commission to investigate dumping.

France, Italy, Portugal and Lithuania backed the decision to protect European industry. Another five countries abstained, China’s 21st Century Business Herald reported on Friday.

The European Commission, which handles trade issues for the European Union, has been investigating dumping for around a year. China solar panels sell for around 47% less, most of that thanks to Beijing providing hefty subsidies, including free land, to solar panel makers, said Usha Haley, a research associate at the Economic Policy Institute in Washington and Director at the Robbins Center for Global Business and Strategy at West Virginia University. Tariffs are expected to come into force on Thursday, June 6 for a trial period, but could be withdrawn eventually if both sides reach a negotiated settlement whereas China agrees to price its product higher.

For its part, a China solar industry group has said that Beijing would retaliate by imposing equally high tariffs on European solar-grade polysilicon, a key material used in making photovoltaic panels.

It seems like a no-win situation.

Paul Barwell, CEO of the UK-based Solar Trade Association, told the China Daily, “The results of this vote send a strong signal to the European Commission that these duties would do much more damage than good to the European solar industry.”

Last week, Angela Merkel signaled she was hoping the tariffs would be temporary. She told China’s Premier Li Keqiang during his visit to Berlin that she would work hard over the  next six months to make sure the issue was resolved without new duties charged to either side in the long run.  Keqiang said that protectionism would hurt both China and the E.U.

On the surface, at least within its desperate public appeal to seem like the wronged party here, China can showcase the fact that its solar industry is also suffering, despite government support.  Suntech Power Holdings was once one of the world’s largest solar panel makers until it filed for bankruptcy protection in the first quarter following a first-ever Chinese default on a $531 million loan.

E.U. ProSun believes Suntech’s fail is beside the point. It defended its position in favor of tariffs in a statement last week, saying that protectionism was not “enforcing the applicable trade law; tackling trade distorting practices or verifying the compliance of China’s export subsidies with the World Trade Organization’s rules.”

They said the temporary tariff was the only means to get China to come to the table.  ”The imposition of provisional anti-dumping duties by the Commission is legally essential to start negotiations,” E.U. ProSun said in a statement. “Negotiations with China would be worthless without this leverage.  Without the duties, China would not have any reason to offer to negotiate.”

On news that Germany was against higher tariffs, SolarWorld shares fell 8.1% in Frankfurt and are now in penny share territory.  China solar shares didn’t do much better, with JA Solar down 6.14% Friday and Trina Solar down 5.5%.

Over the last five days, the market has been betting on a China victory. SolarWorld shares are up 7.24%. But JA’s shares are up 75.18%. Over the last 12 months, investors who had the guts to hold saw their initial investment skyrocket by 715.5% while SunWorld shares fell 50%.

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