Report: EU anti-dumping measures could cut UK solar market by 80%

The potential imposition of trade duties on Chinese-manufactured solar products in the EU could cut the UK solar market by up to 80%, new research claims.

This could cost the UK economy £3.46 billion and result in 38,600 job losses, according to a report published by Swiss analysts Prognos and commissioned by AFASE, a body representing European solar manfuacturers opposed to EU trade measure against China.    

The study modelled the impact of potential EU anti-dumping measures, such as the ones introduced in America last year, on the European solar PV value chain. The company’s analysis was based on three scenarios of potential duties: 20%, 35% and 60%.  To put those figures into context, the US Trade Commission imposed duties ranging from 24% to more than 250%.

The table below summarises Prognos’ findings:

 

Job losses EU - (UK)

Losses of EU value added - (UK)

1st year

3rd year

1st year

Over 3 years

Duty rate of 20%

- 115,600 jobs

- 175,500 jobs

€ 4.740 billion

€ 18.4 billion

(UK - 14,200)

(UK - 19,300)

(UK - €0.53/£0.46b)

(UK - €1.88/£1.62b)

Duty rate of 35%

- 199,700 jobs

- 244,100 jobs

€ 8.170 billion

€ 27.8 billion

(UK - 28,200)

(UK - 36,700)

(UK - €1.05/£0.91b)

(UK - €3.67/£3.16b)

Duty rate of 60%

- 193,700 jobs

- 242,000 jobs

€ 7.860 billion

€ 27.2 billion

(UK - 31,500)

(UK – 38,600)

(UK - €1.18/£1.02b)

(UK - €4.01/£3.46b)

The figures reveal that the UK would be the comparatively hardest hit by any potential anti-dumping or countervailing duties out of all other EU member states. Even at the most conservative duty rate modelled, Prognos is predicting that the UK solar market could lose 19,300 jobs by 2015.

The study found that any import duty placed on Chinese-manufactured solar products would lead to a dramatic decrease in demand for solar products across the EU solar value chain because of the price sensitivity of the solar market. Any import duties would significantly raise the cost of installing solar in the EU – Prognos believes that the UK market will bear the brunt of any potential impact because more than 80% of solar installed in the UK originates in China and the UK has limited domestic PV manufacturers to meet the demand gap.  

Commenting on the report’s findings, Thorsten Preugschas, CEO of the German project developer Soventix, a spokesperson of AFASE, said: “The potential positive impact of duties for the EU solar producers is dwarfed by the negative impact on employment in the EU. Due to the imposition of tariffs production of EU solar products increases and some jobs are being created. However, the jobs created by the EU solar producers represent at the very most 20% of the jobs lost along the PV value chain.”

The report coincides with the ongoing European Commission hearing over anti-subsidy complaints against Chinese-manufactured solar PV products in Brussels. The complaint was levelled last September by industry action group EU ProSun, a joint initiative of EU solar businesses.

The group claims its members cannot  compete with the "state capitalism of the People’s Republic of China" and that anti-subsidy and anti-dumping measures against China would create a level playing field for EU manufacturers. ProSun has asked the commission to impose tariffs of up to 120% stating this would allow EU producers to operate profitably

However, there is strong opposition to the imposition of EU trade duties across the solar market – at a BPVA organised debate in the House of Commons last December, Gregory Spanoudakis, President of Canadian Solar European Operations and Chairman of the Alliance for Affordable Solar Energy (AFASE), said: “There is no industry in this world that is not subsidised in some way, shape or form. Subsidies do not equate to free money. Tariffs endanger the aim of grid parity and the hopes of achieving it any time soon.”

The EU trade commission is expected to make decisions on the subsidising and dumping of Chinese-manufactured solar products between May and August this year.