The Need for Liberal PV Markets from an Economic Perspective

Nov 30th, 2011 | By | Category: Articles, Economical Impact

Restrictive Trade Measures Will Drive Up PV Product Prices and Result in Delayed Achievement of Economical and Environmental Objectives

  • Any restrictive trade measures resulting in levy of tariffs on imported Chinese PV products will inevitably drive up prices for companies that purchase PV panels and components, seriously hit their business development and may also slow the installation of urgently required renewable energy systems worldwide. In addition, they will also unavoidably cause serious impairment to the sustainable development of the green energy industries as well as consumer’s interests.
  • Restrictive trade measures would also impose a severe threat for the European PV industries’ objective of contributing at least €25 billion to the respective national economies until 2020 as outlined in the PV-Roadmap 2020 by Roland Berger Strategy Consultants and Prognos AG on behalf of the German Federation of the Solar Industry.

European PV Companies Benefit from Global Trade as Industry Equipment Suppliers of Chinese PV Industries

  • The China Chamber of Commerce for Import and Export of Machinery and Electronic Products (CCCME) has outlined in a recent study that much of the raw materials and equipment used by Chinese PV companies are imported from the U.S. and Europe. To produce PV products, Chinese companies spend $2 billion annually to import raw materials such as poly-silicon, ethylene vinyl acetate (EVA) and silver paste, among other inputs. The PV industry equipment imported to China and the technology licensing costs paid by Chinese companies were no less than $3 billion in 2010.
  • Any such trade measures may also incur collateral damage including potential job losses in the global PV industry, which due to the enormous benefits of cost-efficient PV products from China have created significant numbers of jobs all across Europe and the world. The loss of these jobs in Europe might also incur opportunity cost, as unemployment compensation would unavoidably rise in the countries concerned.

Mid-Market PV Installers and Project Developers Might Be Most Concerned by Unjustified Trade Measures, Hitting PV Sales and Employment in Europe

  • Mid-market PV project developers and installers are going to suffer declining sales and earnings, should tariffs on Chinese PV products be imposed as a consequence of trade measures.
  • Trade measures are putting at risk crucial European economic objectives such as job growth and manufacturing exports, as well as the achievement of renewable energy goals. In addition, it is threatening the remaining European solar industry that is creating jobs and is continuing its progress toward achieving grid parity for solar energy.
  • “Dumping” allegations against Chinese PV companies are unsubstantiated, as current losses of European PV companies rather have both macro and micro economic reasons. The gloomy U.S. economy and EU sovereign debt crisis result in tight financing and delayed projects; inventory accumulated due to a over expectation in Q4 of 2010. These circumstances result in fast price declines which in turn eat into profitability.

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