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More Harm than Good: Lux Research Expects Solar Power to Become More Expensive in the U.S. with the Proposed Tariffs on Chinese Solar Cells

Lux Research


Boston, MA – June 6, 2012 – While the preliminary tariffs recently announced by the United States Department of Commerce (U.S. DOC) should – at face value – help drive the U.S. solar industry, reality will be quite different. Work-arounds still exist for Chinese manufacturers that will keep them very competitive against those of plaintiffs such as Solarworld, while U.S.-based polysilicon manufacturers will likely suffer the brunt of retaliatory tariffs as they ship into China. The end result? Solar power generation will become more expensive in the U.S. right around the time when it was becoming competitive with traditional power generation sources.

While tariffs on panels from Suntech, Trina, Yingli, and LDK will be just over 31%, solar manufacturers that did not provide any documentation will experience tariffs of 249.96%. The tariffs will be retroactive by 90 days, making them applicable to panels shipped from the middle of February 2012. The scope of anti-dumping is the same as the initial countervailing duties where cells made outside of China, but assembled into modules in China, will not be subject to anti-dumping tariffs.

By moving US-bound module manufacturing outside China – Taiwan for example – Chinese module prices can likely stay in the $0.90/W to $1.10/W range, depending on the manufacturer. This is slightly upward of the prices that drove 1,860 MW of installations in 2011. A slowdown in growth no doubt follows but U.S.-based manufacturers are not the game changers, let alone the real winners. The likes of Taiwan, Vietnam and Malaysia represent the biggest beneficiaries of this policy.