Solar Tariffs to Boost Prices for Chinese Panels by 14%

Prices for solar panels from China that are brought into the U.S. will go up by an average of 14 percent because of import duties that may be announced later this year, GTM Research said in a report yesterday.

That will mean an increase of about 10 cents a watt in the price of Chinese solar panels and will “in a lot of cases negate the price advantage the Chinese have had,” said Shayle Kann, vice president of research at GTM Research in Boston.

Chinese solar producers have become the dominant suppliers by charging less than suppliers in other regions. Duties will make panels made in Southeast Asia by U.S. companies SunPower Corp. (SPWR) and First Solar Inc. (FSLR) more competitive against the largest Chinese producers like Yingli Green Energy Holding Co., and may hurt developers of large, utility-scale power plants, said Kann.

“They’re going to have the hardest time making the numbers pencil out,” Kann said. “It’s hard to call what portion of the market will be put in jeopardy.”

Developers of solar projects that compete directly with coal, gas and wind power plants, selling to the grid at wholesale prices, may face pressure, said Kann.

Rooftop solar systems compete with more expensive retail electricity prices, and increased prices for panels won’t have as great an impact on the total cost of power.

The price of panels sold on the spot market was 79 cents, according to a June 9 Bloomberg New Energy Finance survey.

2012 Tariffs

This round of tariffs may have a bigger impact than those levied in 2012, which only affected cells made in China and allowed companies to produce cells in a third country, like Taiwan, bypassing U.S. import duties while adding little to costs.

Import duties are unlikely to lead to companies following SolarCity’s lead by building production facilities in the U.S.

SolarCity this week said that impending tariffs were part of the rationale behind its purchase of panel manufacturer Silevo, including a 1-gigawatt capacity plant it will build in Buffalo during the next two years.

“It’s unlikely that you’re going to see a lot of Chinese manufacturers set up in the U.S.,” said Kann. “I don’t think it’s going to usher in a new wave of manufacturing in the U.S.”

The U.S. Commerce Department set preliminary countervailing duties of 19 percent to 35 percent on June 3. A final determination is expected by Aug. 18. The International Trade Commission is also expected to issue a ruling on the issue within 45 days of the Commerce decision. That may result in a final 14 percent average price increase for panels, depending on mitigation strategies of Chinese suppliers, GTM estimated.

To contact the reporter on this story: Ehren Goossens in New York at egoossens1@bloomberg.net

To contact the editors responsible for this story: Reed Landberg at landberg@bloomberg.net Will Wade, Carlos Caminada

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