The European Union's (EU) anti-dumping tariffs are spurring an increase in prices for China-made solar modules, marking the end of a period when available inexpensive photovoltaic (PV) devices enabled fast growth of installations in the region, according to IMS Research.
After declining for 48 months since the first quarter of 2009, with a seasonal uptick in February 2013, average pricing for China's crystal polysilicon modules in Europe rose by 4% in June to EUR0.54 (US$0.72), up from EUR0.52 in May. Pricing is expected to continue climbing in July and then again in September, with the average increasing to EUR0.55 by the end of that month.
"With the plan to reduce government subsidies in Germany starting in April 2012, low-cost PV modules from China took over as the engine of growth in the European solar market, enabling the continued expansion of installations," said Henning Wicht, senior director of solar research for IMS Research. "However, the era of low-cost China modules is now over, as prices have risen due to the EU Commission's implementation of preliminary anti-dumping tariffs. This will have a negative impact on solar installations, and is likely to cause many companies engaged in the engineering, procurement and construction (EPC) of solar systems to go out of business in 2013."
The EU Commission imposed the tariffs on June 5, 2013. The duties of 11.8% correspond to a net value of EUR0.05-0.055 per watt. This additional cost has translated directly into an increase in prices for buyers.
Prices now are rising again partly because of the closing of a loophole that allowed them to bypass the tariff. Some China suppliers in May and early June used Croatia's transition from a non-EU to an EU member state, and declared modules shipped to Croatia before July 1, 2013 as duty-cleared goods. However, this circumvention is no longer available, the firm said.
The major factor determining module pricing in Europe in the third quarter of 2013 is whether officials from the European Union and China will agree on the future trade of solar modules. As of July 15, it was not clear that both parties could come to an agreement before the August 5, 2013 deadline.
As a result, average tariffs on imported Chinese solar modules could rise in average by 47.6% during the period from August 5 through December.
On the global scale, the price increase in Europe has been compensated by declining prices in Japan.
"China modules sold to Japan dropped below US$0.70 per watt on average in June 2013, the first time in history they have been at such low levels," noted Glenn Gu, senior PV analyst at IMS Research. "China suppliers are competing furiously and driving prices down in Japan, despite restrictive regulations on imports and quality."
