The minimum price that Chinese manufacturers can charge EU buyers will fall to €0.53/W for the second quarter of 2014, Solar Power Portal has learned.
A senior industry source has confirmed media speculation in China last week that said a drop in price was imminent, possibly as soon as tomorrow, 1 April.
The current level of €0.56/W, agreed as part of the EU-China solar trade deal last year, can be adjusted each quarter if market prices fall. The annual quota for Chinese manufacturers looking to access the EU market will remain at 7GW as it can only be adjusted annually.
“If the rumours are true then this is a welcome move from the [European] Commission and a move that we factored into our recent strike price modelling,” said Paul Barwell, CEO of the Solar Trade Association (STA).
“There has been anecdotal evidence that non-Chinese manufacturers are now able to sell below the minimum import price (MIP) for Chinese panels, putting Chinese manufacturers at an unfair disadvantage.
“This news, if confirmed, will boost the availability of high quality product from the leading Chinese manufacturers, and sends a clear signal that solar prices are continuing to fall,” added Barwell.
Ian Draisey, managing director of BayWa r.e. Solar Systems, a distributor in the UK, warned the impact of the decision could be less than some have expected.
“Depending on the strategy of the distributor, this will either maintain the current inertia in the market, though bringing tier one Chinese product into line with that now sourced from European or Korean manufacturers. Those who bought aggressively in preparation for a busy spring may find the reduction a bitter pill, but nevertheless have the eight-week shipping time to move stocks, which, given the current market should be ample,” said Draisey.
“The bigger impact is potentially on the supply to medium- and large-scale projects. Tier one is now ‘back in the room’ and investors may well be weighing up the risks of origin uncertainties against the bankability of the better known, and experienced brands. For BayWa r.e. our core market of the small- to medium-scale installer may well be unaffected, with the only potential impact a price reduction to help balance the impact of the recent FiT degression,” he added.
Distributors, installers and project developers in Europe have been warned against trying to circumvent the price undertaking and could find themselves liable for punitive import duties if caught. Customs officials in the Netherlands have already detained a consignment of modules in order to determine their origin in a clear sign that the undertaking will be enforced.
The European Commission would not comment on the MIP decrease to Solar Power Portal.
Additional reporting by Peter Bennett