Trina Exits EU Pricing Program as Solar Import Duties Extended

  • Trina says extended import price clamp dents global stratgy
  • Company to sell to EU market through factories outside China

Trina Solar Ltd., the world’s biggest solar manufacturer, is withdrawing from a voluntary program to sell panels in the European Union above a fixed minimum price that the company said is hindering its global expansion strategy.

Trina and other Chinese manufacturers agreed to participate in the so-called EU Price Undertaking in December 2013, and the Changzhou, China-based company is pulling out after EU regulators extended what was initially expected to be a two-year program, according to a statement Friday.

The move is part of a long-running trade dispute with the EU, which imposed in December 2013 two sets of duties on panels imported from China to counter alleged below-cost sales in Europe and alleged Chinese subsidies. Manufacturers that agreed to participate in the program avoided the duties.

The extended pricing program “misinterprets the rules and scope of the original” agreement, Trina Chairman and Chief Executive Officer Jifan Gao said in the statement, and “adversely affects the execution of our global expansion strategy.”

The pricing program was extended after the European Commission said Dec. 5 that it will re-examine the original anti-dumping and anti-subsidy duties. The trade policies were due to expire Dec. 7 and will remain in place during the review process, which may take as long as 15 months.

Minimum Price

The voluntary agreement set a minimum price of 56 euro cents a watt, according to James Evans, a clean energy analyst at Bloomberg Intelligence.

The current minimum import price “does not reflect the ongoing market trends in the solar sector, particularly as average selling prices in major markets continue to decline at a faster than expected rate,” Trina said in the statement.

“Exiting the undertaking agreement may lead to ASP decline and margin erosion in the region,” Mahesh Sanganeria, an RBC Capital Markets analyst, said in research note Friday.

Trina will continue to pursue sales in Europe through factories outside China, the company said. Chinese solar manufacturers have been opening production facilities in other countries in recent years., a move that may let them circumvent import barriers.

New Factories

“We’ve been seeing Chinese firms open plants in places like Malaysia, Thailand and Vietnam to avoid U.S. and European import tariffs over the last two to three years,” Evans said by phone Friday.

Companies including Norway’s REC Solar ASA, the biggest panel supplier to the EU, have said the price clamps on Chinese imports are counterproductive to the market’s development. Criticism of the policy extends to polysilicon makers like Germany’s Wacker Chemie AG, the world’s second-biggest producer of the compound that forms the basis of solar wafers.

“Of course I want the import barriers to run out,” the company’s Supervisory Board Chairman Peter-Alexander Wacker said in a Nov. 9 interview. Tariffs keep the price of solar installations from falling faster and weigh on the German government’s growth targets.

Before it's here, it's on the Bloomberg Terminal.
LEARN MORE