Fresh U.S. solar tariffs imposed on Chinese exporters


The Commerce Department has imposed preliminary anti-dumping tariffs ranging from 26%-165% on Chinese and Taiwanese solar cell/module imports. The tariffs come on top of the anti-subsidy tariffs imposed in early June, and in spite of a WTO ruling declaring U.S. solar tariffs violate global trade rules.

Among the affected exporters,Trina (NYSE:TSL) is getting off the lightest: Between the June and July tariffs, it's dealing with a combined rate of 29.3%.

Yingli (NYSE:YGE), Canadian Solar (CSIQ), and Hanwha (NASDAQ:HSOL) are set to pay a combined rate of 47.27%, and Suntech (NYSE:STP) a combined rate of 49.24%. ReneSola (NYSE:SOL) and JinkoSolar (NYSE:JKS) have to pay a 58.87% anti-dumping rate.

Chinese module makers can pay 2012 tariff rates instead if they use Chinese (rather than Taiwanese) cells. Those rates are generally a little milder, often ranging from 24%-31%.

"The tariffs in this case are so high as to prohibit basically any manufacturer from selling at a competitive price in to the U.S," says GTM Research's Shayle Kann. A final DOC ruling on the tariffs is expected around Dec. 15, and an ITC ruling on Jan. 29. (the full ruling - .pdf)

U.S. rivals First Solar (NASDAQ:FSLR) and SunPower (NASDAQ:SPWR) stand to benefit. Their shares rose following the June tariff announcement.

Other Chinese solar firms: JASO, CSUN, LDK

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Comments (20)
  • CDM Capital
    , contributor
    Comments (458) | Send Message
     
    This is why Solarcity's business model was not working. Input costs are skyrocketing due to tariffs, causing NPV's to plunge. $SCTY is in a last ditch effort to become a solar manufacturer, which is not as easy as the sell-side wants you to believe.
    27 Jul 2014, 11:08 PM Reply Like
  • Andy Zelenak
    , contributor
    Comments (404) | Send Message
     
    SolarCity can still get relatively cheap panels from REC and ReneSola. Plus, keep in mind the cost of the module is just a small fraction of the total cost of a solar project.

     

    A numeric example: say the module cost/Watt goes up 3 cents. On a typical 6kW residential project, that adds $180. Significant but not a deal breaker. SolarCity will probably fare better than the smaller players.
    27 Jul 2014, 11:26 PM Reply Like
  • Andy Zelenak
    , contributor
    Comments (404) | Send Message
     
    $180 would be about 0.8% of the total project cost.
    27 Jul 2014, 11:55 PM Reply Like
  • larryvand
    , contributor
    Comments (214) | Send Message
     
    Exactly. In any another post I went to a greater detail why the U.S. tariffs are great news and a windfall for Renesola. Recommendation: Sell JKS, CSIQ, TSL, YGE and buy SOL.
    28 Jul 2014, 05:34 AM Reply Like
  • hs_finance
    , contributor
    Comment (1) | Send Message
     
    Much more than 3 cents a watt. If their currenct cost is 75 cents a watt , then a min of 30% is 20 cents per watt , at 6 kw assume a cost of $3.00 a watt, this could be as high as 7%.
    Certain technologies are exempt from tariff , that is what Solar City should focus on.
    28 Jul 2014, 08:44 AM Reply Like
  • RalphMartin2
    , contributor
    Comments (28) | Send Message
     
    Lol.
    28 Jul 2014, 11:54 AM Reply Like
  • King Rat
    , contributor
    Comments (1742) | Send Message
     
    So now the US is making green energy more expensive for consumers which will encourage more use of coal. Protectionism makes for strange bedfellows.
    27 Jul 2014, 11:22 PM Reply Like
  • PlanetThoughts
    , contributor
    Comments (55) | Send Message
     
    King Rat, you may have something of a point but in my opinion, based on various articles and economics, the momentum is to adopt solar anyway. There are other savings that outweigh the potential cost increase. Newer products from SPWR and FSLR will do very well on rooftops, so I think at worst the tariffs would lead to a short-term bump in price (for those who would have chosen Chinese panels for a project).
    28 Jul 2014, 07:52 AM Reply Like
  • jsIRA
    , contributor
    Comments (4364) | Send Message
     
    This gives no benefit to US solar industry and the customers who use the solar energy.

     

    Let us see what will happen if Chinese stop exporting solar cells to US at all.
    27 Jul 2014, 11:28 PM Reply Like
  • JYX
    , contributor
    Comments (33) | Send Message
     
    this is the worst decision US government could make... at the expense of our citizens and country just to benefit a few domestic company... what a bad move
    28 Jul 2014, 01:10 AM Reply Like
  • SA User 74XXXXX
    , contributor
    Comments (836) | Send Message
     
    The mandate is obvious: Keep drilling for shale gases until the last reserve is found and penetrated.
    28 Jul 2014, 02:04 AM Reply Like
  • larryvand
    , contributor
    Comments (214) | Send Message
     
    The US tariffs are a big WIN for Renesola. Renesola has in fact NOT been shipping taiwan cell based modules to the US since March 26. http://bit.ly/1o5AFx1 With their OEM business with modules and cells from Korea, India, Malaysia, Poland, S.Africa, and Turkey, they can continue shipping modules to the US without any fear of tariffs. In fact these tariffs will cause Taiwan and Chinese cell prices to implode which is a tremendous cost benefit to Renesola as they outsource nearly all cell production, unlike JKS, CSIQ, TSL, YGE who are all big cell producers and they don't have a choice. So Renesola will see lower costs in Chinese and Taiwan cells for shipping modules to everywhere other than the US, and will see higher ASP for shipping modules to the US from any of the non-Taiwan and non-Chinese cell and module OEMs, like Korea, India, Malaysia, Poland, S.Africa, and Turkey. The US. tariffs will be a windfall for Renesola.
    BTW, here is links to the press release that Renesola had stopped shipping Taiwan based cell modules since way back in March. Where are similar news from Trina, YGE, CSIQ and JKS??? They don't exist because they are big Chinese cell manufacturers with massive cell capacity which is now a big boat anchor around their necks. Recommendation: Sell JKS, TSL, YGE, CSIQ and buy SOL.
    http://bit.ly/1o5AFx1
    28 Jul 2014, 05:28 AM Reply Like
  • PlanetThoughts
    , contributor
    Comments (55) | Send Message
     
    Thanks, good info.
    28 Jul 2014, 07:54 AM Reply Like
  • citizentod
    , contributor
    Comments (11) | Send Message
     
    Considering the current market cap and SOL's tremendous opportunity due to these tariffs, the company is ripe for a buyout. Even considering the debt that it has, SOL is a must have by any of the afforementioned sell recommendations if any of them wanted a competitve piece of the US market. India is looking into similar penalties as well.
    28 Jul 2014, 08:42 AM Reply Like
  • RalphMartin2
    , contributor
    Comments (28) | Send Message
     
    SOL can't make money at 75c asp
    28 Jul 2014, 11:55 AM Reply Like
  • larryvand
    , contributor
    Comments (214) | Send Message
     
    SOL gross profit last quarter was $44 million with 10.6% gross margins. SOL is the only one that has guided for increased margins for Q2 (12-14%) with projected ASP of 68c, and I think they will beat their GM guidance. So you figure out what their gross margins will be if their ASP were 75c instead of 68c.

     

    BTW, JKS, CSIQ TSL YGE JASO have all guided for their gross margins to decline. It must suck to not have their own poly plant at time of higher poly prices.

     

    You are probably in CSIQ anyway and crying right about now (down 7% today while SOL flat). So get ready to kiss those CSIQ U.S. projects goodbye...
    29 Jul 2014, 04:33 PM Reply Like
  • CT Programmer
    , contributor
    Comments (1050) | Send Message
     
    Absolutely amazing to me that this administration, which purports itself to be green, would impose these sanctions even when the WTO has sided with China. Besides the hypocrisy of having the effect of raising prices on domestic solar purchases while you're trying to encourage them, what happens when all this eventually gets struck down? Will the U.S. government then be on the hook to pay a huge settlement to the Chinese manufacturers?
    28 Jul 2014, 09:50 AM Reply Like
  • MIaffal33
    , contributor
    Comments (94) | Send Message
     
    There is no settlement unless Chinese suppliers take it to the Court of Intnernational Trade. Anti-dumping duties are to protect the US manufacturers and the tariff rates are based off questionares and averages received from the Chinese suppliers. If they (US interests) can prove they have been harmed, then they impose additional duties, which is what they have done. If the Chinese suppliers could prove no harm in CIT, then the rates/refunds would be adjusted. This is typical of only certain suppliers that dispute the findings, which is usually minimal. Long story short, the U.S. Government is never on the hook...
    28 Jul 2014, 04:19 PM Reply Like
  • wright151
    , contributor
    Comments (15) | Send Message
     
    I agree, There may be some kind of influence peddling going on here, or perhaps the US is trying to get Chinese solar manufacturers to start up US plants, much like they pushed Toyota to do. There may be a concern that huge sales of Chinese panels to the USA would cause an additional balance of payments issue with China. But why have Apple and Samsung not been penalized also? Would an announcement by Trina, for example, that it would build a US plant to serve the likes of Solar City suddenly double its stock price?
    28 Jul 2014, 01:47 PM Reply Like
  • kubis
    , contributor
    Comments (84) | Send Message
     
    Extremely high duties might be a sign that US PV manufacturers simply can't compete with vertically integrated Chinese manufacturers any more. They will also hurt US manufacturers in medium and long term because this basically closed the door on Chinese market. Chinese manufacturers will just focus on fast growing Japan, domestic, South America, South Africa and other markets. Those countries will get quality panels for the prices we can only dream of now.
    29 Jul 2014, 01:32 AM Reply Like
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