The turnaround in module prices that was showing last month has been confirmed. It has been accelerated by what has proven to be an unpredictable and unpleasant development for the market. In the first week of March the wording of an EU Directive dating from 01.03.2013 was published, according to which all imports of Chinese solar modules must be registered by the customs authorities.
The directive clearly states that subsequent to the completion of the current anti-dumping and anti-subsidiary investigation by the EU, customs duties will be levied, also retroactively, on all modules imported from China. There are different estimates regarding the level of the duties that will apply. The directive states a so-called 'dumping margin' of up to 70% and a 'subsidy margin' of up to 15%. These should then form the basis for the duties that are to be levied.
A final decision can be expected for June 6, 2013. The final tariff level will be based on the amount of undercutting manufacturing costs for the module sale in Europe. In addition, the EU investigation has proven that by such actions by Chinese manufacturers the market as a whole has taken damage. The implementation of such registrations has caused jitters among European buyers. Since the amount of the punitive tariff duties is not assessable yet, no final sales price (calculation basis for all sorts of PV systems) can currently be shown. At the moment this makes financing nearly impossible. Manufacturers from China relocate this risk by transferring the import of the modules to the buyer.
Accordingly the run on goods currently stored in the EU has been huge. During the first days after the details of the directive became known, the demand for as well as the price of the modules increased by as much as 10%. These stocks of Chinese goods are, however, set to drastically decline over the weeks to come. Many dealers are now buying for stock again. What opportunities do Chinese manufacturers have for defusing this situation? The directive (if it is similar to the law applicable in the United States since 2012) concerns modules with crystalline wafers and cells from China. As far as possible, the affected manufacturers could equip their products with cells from Taiwan, which would result in a price increase of a few cents. Many Chinese manufacturers are already seeking out production capacity in Europe. This would lead to a price increase for end products “made in Europe” by at least 10 Cent/Wp.