The Impact of Trade Barriers on Innovation and Development of the Global PV Markets

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

Market Growth of Chinese PV Product Exports Results from Competitive Advantages, Not Dumping or Illicit Subsidies

  • Growth of Chinese PV product exports worldwide results from competitive advantages on the market, not dumping or subsidies: This fact is underlined by several Chinese PV suppliers taking top rankings in the latest global PV industry sustainable growth index report released by PRTM in 2011. Extraordinary growth dynamics and demand volatility overstrains many non-Chinese market participants, long-term analysis of the PV market has shown. Within the seven year period of the study, provided data suggest that no company has ever managed turnaround. Only two companies so far managed to persistently retain an excellent market position once achieved, according to the PRTM Photovoltaic Sustainable Growth Index 2011.
  • Leading Chinese PV companies are an important component of the global PV industry chain and have made tremendous contribution to the development of the global PV industries. These tremendous achievements of Chinese PV companies have been recognized at events as renowned as the Davos World Economic Forum in 2010.

Tremendous Support for Chinese PV Companies Worldwide Underlines Potential Severity of Market Impact Caused by Trade Restrictions

  • Chinese PV companies have received substantial support from PV companies and industry associations – such as The Coalition for Affordable Solar Energy (CASE) – in their fight in the investigations and will continue to seek cooperation and common development. Any trade action would be threatening to directly hurt all levels of the global PV industry and could undermine decades of industry progress and innovation.
  • Failure in cooperation and common development of PV products and projects would incur significant losses for all sides: particularly innovation would be severely hampered as synergies and economies of scale can obviously not be exploited.

Imported PV Products Have Contributed to Enormous Wealth Creation in the EU and Beyond, the PV Status Report of the European Commission 2011 Has Shown

  • The PV Status Report of the European Commission points out that looking only at the cell production does not grasp the whole tremendous growth of the European PV Market in 2009 and 2010. For instance, “more than two-thirds of the in Germany installed solar cells are not produced there,” but “about 60 percent of the added value remains within the German economy”. To measure market growth the upstream industry (e.g. materials, equipment manufacturing etc.) and downstream industry (installations, system development etc) has to be taken into account.

LINK to:  PV Status Report 2011  of the European Commission 

  • It is therefore obvious that imposing tariffs such as “countervailing and anti-dumping duties” on PV products from Chinese manufacturing would severely hamper global free trade, hurt European PV companies and consumers alike and would eventually result in an “economic lose-lose situation” for all parties involved.

Restrictive Trade Measures Inflict Great Damage upon Technological Innovation in the Global PV Industries

  • Chinese PV companies take a technological leadership position in various fields of the global solar industry. Restrictive trade measures would deprive customers and the general public of benefitting the advantages of these outstanding products. Due to the advantage of PV companies from the Middle Kingdom in technological innovation, products from these suppliers received numerous renowned industry awards, including recognition from independent institutions such as German TUV and Australian DKA.
  • The development of innovation in the PV sector would substantially be curtailed by trade measures: PV technology “Made in China” set several power output records in tests conducted by independent European testing institutions. Such awards underline Chinese PV suppliers’ position of excellence in terms of innovation on the global PV markets.

 

Declining PV Product Prices Help Achieving Grid Parity Earlier – Trade Measures Delay Competitiveness of Global PV Industries Compared to Alternative Sources of Energy

  • Declining PV product prices will help achieve grid parity even earlier and thus further drive competitiveness of renewable PV energy compared to conventional methods of power generation, as several studies – including the PV-Roadmap 2020 by Roland Berger Strategy Consultants and Prognos AG on behalf of the German Federation of the Solar Industry – have shown. In times of spiking oil prices and discussions about residual risks and phase-out of nuclear energy – i.e. in Germany – market-based competitiveness of PV energy has become more important than ever!
  • Chinese PV companies and industry associations take confidence in surmounting obstacles posed by possible trade investigations and will maintain and strengthen its competitiveness in the global markets in a bid to ensure supply of both cost-efficient and innovative PV products. In any case, they have always adhered to the rules of international free trade and all of their business-related activity has been in conformity with WTO rules.

 

Dumping Allegations Are Wrong: Chinese PV Companies’ Competitive Advantage Results from Lower Operating Costs and More Advanced Manufacturing Technologies

  •  With respect of dumping allegations, while it is a fact that the manufacturing costs of Chinese PV companies are lower than those of their European peers. Such lower costs are primarily attributed to the concentration of the PV industry chain in China, and relatively more efficient management systems, more advanced manufacturing technologies, larger production scales, and forward-looking business strategies, according to a study by the China Chamber of Commerce for Import and Export of Machinery and Electronic Products (CCCME).
  • With respect of subsidy allegations, the supports granted by the Chinese Government to Chinese PV industries are not prohibited subsidies under applicable laws or the relevant WTO agreement, the same study on behalf of CCCME has found. As a matter of fact, many countries in the world have been providing various forms of support to their domestic green energy industries, and proponents of restrictive trade measures have mostly been a beneficiary of such support as well.

 

The Chinese PV Industry Has Made Tremendous Investments into the Renewable Energy Sector

  • Denunciation of the Chinese PV industry is also unjustified because of their significant investments in the renewable energy sector. According to the PV Status Report 2011 Research, Solar Cell Production and Market Implementation of Photovoltaics by the European Commission, new investment in clean energy technologies, companies, and projects increased to a new record of $243 billion (€187 billion), up 30% from 2009 and for the third year in a row solar power attracted, behind wind, the second largest amount of new investments into renewable energies.
  • Europe was still the leading region in terms of renewable energy investments, but the growth rates of renewable energy investments in the Asia/Oceania region are already higher than in Europe and it is very likely that Asia is becoming the world’s leading destination for renewable energy finance investments.
  • The main driver there are the private investments in China’s renewable energy sector, which increased by 39% to $54.4 billion (€41.8 billion). With this amount China was again the No 1 in the clean energy investment ranking followed by Germany $41.2 billion (€31.7 billion), which surpassed the USA, the USA $ 34.0 billion (€26.2 billion) and Italy $13.9 billion (€10.7 billion), which moved up from No 8.

 


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