Donald Trump's pronouncements and platitudes are on everyone's lips these days - they are frequently quoted, misquoted and lampooned, and more than once met with a healthy portion of dark humor. But Trump’s utterances can also be very pithy and can reduce the most complex issues to a few superficial words. Even ordinary citizens like you and I can understand him. But sometimes, such simplistic statements are right on the mark.
The European solar industry is apparently not so easily influenced by the new American strongman, even though some of Trump's words and actions are certainly cause for concern. But, luckily, the final word has not yet been spoken - not by a long shot - and positive developments are gaining traction. The construction boom in Germany, spurred by continuous price declines in recent months, continued unabated in January. At 600 megawatts-peak, the cumulative amount of additional construction in November and December amounted to nearly half of newly installed photovoltaic systems for the entire year. Both rooftop and ground-mounted systems alike saw a considerable increase.
There can be no doubt that the increase is due to highly favorable price developments for operators and installers. In the last quarter of 2016, module prices slumped across all regions of origin by up to 15 percent. But the price decline seems to have slowed somewhat and in January and February there were no major changes - at least for higher-quality modules. But some rack and inverter manufacturers have lowered their prices across the board, which has made complete PV systems available at historically favorable conditions.
The lowest prices ever recorded - at least since the beginning of module price monitoring and record keeping - have led to a strong increase in demand, as expected. That makes it all the more strange that the European Commission still refuses to budge on its market restrictions in the form of punitive tariffs. The EC has softened its original plan to keep the measures in place a further 24 months. The background is that the EU Member States called upon to vote two weeks ago rejected the restrictions with a simple majority, which unfortunately was not adequate to completely overturn them. Now a new proposal is on the table to shorten the extension of the existing measures, which have been in place since 2013, to 18 months and consider a “phased elimination” of the measures altogether, whatever that means.
Of course, there were immediate protests from minimum import price advocates from the camp of the manufacturer SolarWorld and the EU Prosun association. They argued that a longer duration was urgently needed to finally create fair competition and planning security for investments. The Commission Vice President Frans Timmermans countered, however, that the EU had to respect the interests of companies that depend on these imports to sell their products and services, companies that also employ thousands of people in Europe. Moreover, he said, solar energy was essential for the achievement of Europe’s environmental and climate-protection goals.
Obviously, some of the players in the industry either have not fully grasped China’s existence and role in the whole process or have ignored the fact in a negligent manner. Those who actually believe that the Chinese solar industry will allow itself, through isolation and punitive tariffs on Chinese-made products, to be deterred from dominating the market and winning the trade war is living a fantasy. It is simply part of the Chinese self-image to break through resistance, interpret rules as they see fit, and adeptly bypass rules that threaten economic disadvantage.
Experiences over the past three years with anti-dumping and anti-subsidy measures have shown how seriously Chinese cell and module manufacturers take this issue - and pangs of conscience: non-existent. Such restrictions entice the smaller companies not listed on western stock exchanges to exercise special creativity in disguising and bypassing EU measures, whereas the larger and more prestigious companies prefer to build and open production facilities all over the world whose output is not subject to import restrictions. Until we get over this, the European market will simply be left by the wayside - what a smashing success for us Europeans!
Such pedantry can never defeat an emerging global economic power like China or even constrain it for two or three years, as has been demonstrated. Even if the EU Commission hammers out some sort of lazy compromise solution, who cares? A workaround will be found. But probably not a single European manufacturer will survive thanks to these measures alone. But why waste time playing air guitar? Why not enter into a dialogue and work out deals that help both Chinese and European companies achieve equal measures of success? Accusations and prohibitions do nothing more than challenge the confident economic power of China to wage a trade war that we cannot possibly win. On the other hand, a good deal for both sides will make China an ally.
Overview by technology of different price points in January 2017, including the changes over the previous month (The prices shown reflect average asking prices for duty-paid goods on the European spot market):
