In this exclusive interview with pv magazine, SolarWorld Americas CEO Jürgen Stein gives his perspective on the Section 201 trade case, including responding to criticism of potential effects on the U.S. solar market.
pv magazine: SolarWorld has issued statements indicating that the trade remedies recommended by the ITC on October 31 will be inadequate to restore U.S. manufacturing. For those who missed that statement, can you sum up why you feel that none of the three proposals by the commissioners are sufficient, and why a solution like your company’s tariff-rate-quota proposal is necessary?
Jürgen Stein: First of all, we have to point out that the work of the Commission and its staff was extensive. They went into the details, and, we have to thank them for their work and their unanimous finding of injury to the U.S. solar cell and module manufacturing industry. They took this case and brought it to the level where we are, but we think their suggested remedies could be amplified in several points in order to ensure the long-term success of the U.S. industry.
In terms of the remedy findings of the Commission, all of the commissioners recommended a remedy and that it should be for a period of four years. Which shows that the injury to the industry is obviously quite substantial, and that we need the full four years of remedy for the recovery of the industry. So, we appreciate that all of the commissioners recognize that fact.
Three out of four commissioners recommend tariffs, and three out of four also said that the industry needs funding. These are helpful findings.
What maybe missed is that only a tariff is not sufficient. It addresses the price level to a certain point, but at a lower level, there is the high risk that the import prices will continue to fall so dramatically that at the end of the day the market price we see – even after the application of a lower-level tariff – is not very much different than today. We also need quotas.
We learned this lesson in the dumping cases against China and Taiwan. In those cases, we saw the industry suffer as a result of the dumping of product into the U.S. market, and then circumvention or underpricing of the dumping duty orders. So, we see a high risk that if there is only an ad valorem tariff, vs a per-watt tariff, that the foreign producers will have a manual to bring the goods into the United States on a price level which is again dumping. On the other hand, if there is only a tariff and no quota we are not addressing the other negative behavior of the foreign industry, namely, that overcapacities will continue to build regardless of global demand.
Thus, without a per watt tariff and a quota, the countries that produce the overcapacity will continue to do so. This is the reason that we proposed a per-watt tariff and a quota. We can address it differently with a minimum import price or a floor price, as our co-petitioner did, but you always need some combination of tariff and other remedy.
pv magazine: This is interesting about prices. The latest figures by Bloomberg New Energy Finance indicate that tier-1 Chinese PV makers were making solar panels at $0.32-0.37 per watt in Q3. Assuming that U.S. manufacturers get four years of trade protection, do you think that SolarWorld and other American PV makers will be able to compete with Chinese costs after this four-year period?
Stein: Yes – we will be competitive after four years of an effective safeguard remedy. The problem is, and has been for some time, state sponsored subsidization of production from China and other countries. There is no reason that United States-produced solar cells and modules should be on a different cost level than anywhere else. The highest cost input is material, and that is generally the same globally. Given the technology efficiencies, labor costs are rather small as a part of the total production costs. With good automation and high quality, we can make up for any labor cost matters and produce at the same price levels.
Thus, with appropriate remedy levels, we can have a level playing field. With that, there is no reason why we cannot produce solar cells and modules to the same or a similar cost level in the United States as compared to anywhere else in the world. The levelized playing field is what we need as it seems that companies in Asia, and in China have unlimited access to subsidized money.
Once we get a remedy that levels the playing field, there will be no reason not to produce it here in the United States, which is a goal of this president.
pv magazine: When you talk about levelized trade rules, and things like access to financing… I’ve covered how the Chinese government has provided money through its own state-run banks to these companies, and we have nothing similar in the United States. How can manufacturers located in the U.S. compete with that?
Stein: As I noted above, we need a level playing field. In the long run, it is difficult to compete with companies who have their basic production subsidized continually by the state. This is true not only for our industry, but for all other industries, including steel and semiconductors. So, I think that this significant problem has to be addressed on another level. That is why we included in our remedy proposal that there must be discussions at the government-to-government level to address this systemic problem coming from countries abroad, especially China.
The fact is that given the destruction of the U.S. solar cell and module manufacturing industry, it needs some initial funding to stabilize it now and to scale up and increase capacity. The U.S. industry was not able reach sufficient scale over the last three or four years because we had to chase dumped pricing that eroded our ability to earn profits. So, funding is a piece of the remedy proposal that we requested and that three of the four Commissioners agreed should occur.
pv magazine: In looking for voices who are in support of the Section 201 petition, I have found very few large companies in favor, whereas there are many including the racking and tracking makers and SEIA who are opposed to the petition. Why do you think it is that you have not had support from more of the solar industry?
Stein: The first thing that we have to say, and we pointed this out in all the remedy and injury discussions, is that there is little cell and module industry left. Nearly 30 solar manufacturing companies over the past five years have been driven out of business. This …
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