SOLAR TODAY Blog

By Seth Masia
SOLAR TODAY Managing Editor

Keith Bradsher reports in today's New York Times that Chinese factories are moving full speed ahead to dominate the world market for photovoltaics.

The article says, in part:

Chinese companies have already played a leading role in pushing down the price of solar panels by almost half over the last year. Shi Zhengrong, the chief executive and founder of China's biggest solar panel manufacturer, Suntech Power Holdings, said in an interview here that Suntech, to build market share, is selling solar panels on the American market for less than the cost of the materials, assembly and shipping.

Backed by lavish government support, the Chinese are preparing to build plants to assemble their products in the United States to bypass protectionist legislation. As Japanese automakers did decades ago, Chinese solar companies are encouraging their United States executives to join industry trade groups to tamp down anti-Chinese sentiment before it takes root.

For consumers, a plunge in prices is a good thing. It's good for installers and their employees, because lower prices expand their customer base. A savvy installer will even hang on to a healthy margin as wholesale prices fall. 

But if a lower world pricing structure is good for the folks who work on the roofs, it's bad for folks who work and invest in American and European PV factories.  This is why there's a federal antidumping law, on the books in one form or another since 1916.

Dumping means exporting a product into the U.S. market at an artificially low price, with the effect of taking market share away from domestic manufacturers.  If you publish vendor prices that are less than your cost of goods, or less than the price you charge in your home market, the courts consider that evidence of dumping. If you're found guilty of dumping, you can be subject to countervailing import duties, designed to bring your wholesale prices up to market levels.

Free-market fundamentalists hate the antidumping law. Domestic manufacturers  like it in principle, but rarely bring suit to enforce it. Historically, the issue has been a bear for trade associations with both domestic manufacturers and importers on their boards.