The European Commission’s imposition of anti-dumping tariffs has driven an increase in price for Chinese-manufactured solar modules, according to the latest report by IHS.
The average price for Chinese crystal polysilicon modules in Europe rose by 4% in June to hit € 0.54 (£0.46). The prices rise comes after Chinese module prices declined for the 48 months prior.
The report, PV Price Tracker—Modules, predicts that module prices will continue to rise throughout July and again in September, with the average increasing to €0.55 (£0.47).
“With the plan to reduce government subsidies in Germany starting in April 2012, low-cost PV modules from China took over as the engine of growth in the European solar market, enabling the continued expansion of installations,” said Dr. Henning Wicht, senior director of solar research for IHS.
“However, the era of low-cost Chinese modules is now over, as prices have risen due to the EU Commission’s implementation of preliminary anti-dumping tariffs. This will have a negative impact on solar installations, and is likely to cause many companies engaged in the engineering, procurement and construction (EPC) of solar systems to go out of business this year.”
The analysts have noted that prices are now starting to rise again due to the closing of a loophole that allowed Chinese solar manufacturers to declare modules shipped to Croatia as duty-cleared goods due to its imminent EU membership.
The majority of the solar industry had hoped that the European Union and China could negotiate a settlement and avoid the imposition of further duties before 5 August.
“If the 47.6% tariff goes into effect, global supply lines and pricing for solar modules will be shaken up dramatically,” said Glenn Gu, senior PV analyst at IHS.
“Chinese suppliers initially will suspend almost all shipments to Europe. In order to continue serving the European market, they then will try to shift production capacity to locations outside of China by using overseas branches or via agreements with non-Chinese module makers. But even if they succeed in this, the supply disruption is likely to cause module prices to increase by 12-20% during the following months.”
IHS believes that the Chinese modules that have been duty-cleared will be sold off as Europe enters a state of shortage. The report notes that high-end pricing for duty-cleared modules is forecast to hit €0.60-0.65 per Watt – these will be modules that are subject to the 11.8% anti-dumping duty and are not exposed to the duty due to clearance completed prior to 6 June.
Such a high level of pricing will open the door for South Korean and Western manufacturers of solar as module buyers look for cheaper alternatives, according to the report.