* Possible EU duties could lead trade war to escalate
* Chinese solar companies say duties in EU would be wrong
* JA Solar says has not taken any precautionary measures
By Christoph Steitz
MUNICH, June 13 China's top solar companies have
warned that any punitive action against Chinese cells and
modules in Europe would hurt the industry as a whole, suggesting
such a move would intensify the current trade war and keep the
industry from lowering costs.
Tension between Chinese and western solar groups reached a
new peak after the United States imposed duties of 31 percent on
solar panel imports last month, ruling in favour of local firms
that accused Chinese firms of price dumping.
Industry players taking part in Intersolar in Munich, the
world's largest solar trade show, were therefore abuzz with talk
of the possibility of similar action in Europe.
"We are against any trade barriers. They are very silly and
they don't help the industry," Shawn Qu, the chief executive of
Canadian Solar, the world's No.7 solar cell maker, told
Germany's SolarWorld, which spearheaded the legal
campaign in the United States, is also planning to file an
anti-dumping complaint with the European Commission "by the
"If this happens it would be unfortunate," said Peng Fang,
chief executive of JA Solar, the world's No.3 solar
Depending on the size of potential duties in Europe,
punitive action could deal a massive blow to Chinese makers of
cells and modules.
Europe is still the most important market for solar
products, accounting for 74 percent of global installations in
2011, according to industry association EPIA.
It is also the main market for Chinese producers of cells
and modules who have been eating away market share vis-à-vis
their European peers for years.
In 2011, 57 percent of all solar cells were produced in
China, with Taiwan a distant second at 11 percent, data by
industry publication Photon showed. At close to 7 percent,
Germany - the world's largest solar market by total
installations - comes third.
Experts fear trade action in Europe could take the trade war
to the next level, prompting China to return the favour by
taking similar measures against western solar companies.
"Imagine a trade war. First you would have Europe
implementing duties and then China would want to retaliate. Who
benefits from such a development?," said Andrew Beebe, chief
commercial officer at China's Suntech, the world's No.1
maker of solar cells.
Western solar companies have been at odds with their Chinese
counterparts for years, alleging they receive lavish credit
lines to offer modules at cheaper prices, while European players
struggle to refinance.
Frank Asbeck, the chief executive of Germany's SolarWorld
has long called for action against what he calls dumping by
Asian cell and module makers.
Germany's solar industry has been the biggest casualty in
the sectors' ongoing consolidation, and four of the country's
largest solar players have filed for insolvency since December,
prompting calls for less brutal cuts in government incentives on
which the industry still depends.
Asked whether the company had taken any precautionary
measures to prepare for any import duties in Europe, JA Solar's
Fang said the group would deal with the situation when a
decision had been made.
Suntech was able to successfully digest import duties in the
United States by adjusting its global supply network, Beebe
said, adding the group was prepared for any action in the EU.
Those against import duties also argue that any action in
Europe would delay the point at which the solar industry can
compete with conventional forms of energy, also called grid
Until that happens, solar companies need to lower their
costs further and remain profitable in light of the withdrawal
of necessary state subsidies.
"The solar industry is like a marathon. It is nothing you do
for the short term," Canadian Solar's Qu said.