Love and loathing relationship between Europe and China solar firms Nuying Huang
China has been playing an important role in the debt crisis in Europe by supporting the region with funds.
Initially, most solar firms in Greater China believed that it would be unlikely for Europe to start its own anti-dumping and anti-subsidy investigations against China-based solar firms. However, after the announcements of the 31-250% anti-dumping duties on May 17 by the US government, the market has been watching closely on the next move of Europe's governments. Recently, media in China have been calling out Germany-based SolarWorld for dumping solar modules. But during times of crisis, China has been the country providing loans to support Europe's economy. The love and hate relationship between Europe-based solar firms and China-based peers continues to churn.
The debt crisis in Europe continues to unravel and China has been providing loans at different stages in recent years. China's effect on Europe's debt crisis is quite significant. This is the reason why the market believed it unlikely Europe would take on the anti-dumping and anti-subsidy investigations against China-based firms. The debt crisis in Europe is more important than the market conditions in Europe's solar market.
Industry sources noted that the high duties announced by the US government are likely to induce Europe to do the same. This has been quite unnerving for China-based solar firms that rely heavily on orders from Europe. According to China media reports, SolarWorld has been quoting solar modules around EUR0.58/W (US$0.72/W) to secure a project of 10MW in China. This low price was able to outbid competitors such as Hareon Solar, Canadian Solar and Jinko Solar. China media reports suspect SolarWorld has been issuing OEM orders in Asia in order to achieve this low-level quote.
Industry sources noted that it is quite unusual for SolarWorld to be able to quote on such low levels. In addition, demand in Germany and Italy in the second quarter has been healthy, there is no need for SolarWorld to fight fiercely to obtain projects.
Europe-based solar firms have been holding grudges against China-based peers due to price competition. Furthermore, governments in Europe have been cutting incentives in recent years which further reduces the competitiveness of Europe- and US-based solar firms. When filing for bankruptcies, some solar firms have been blaming China for the fallout.
Despite the grudges, Europe-based solar firms have been reportedly looking to form strategic alliances with China-based peers. For example, Norway-based Elkem Solar was sold to China National Bluestar at the beginning of 2011.
