U.S Import Sanctions on Chinese Solar Panel imports will soon become a non-event as Chinese solar panel producers are easily short circuiting the sanctions.
Using a number of strategies to protect themselves from the upcoming duties and anti-dumping measures, China is proving that globalization makes the use of specific duties on a nation quite useless, and really only seems to benefit the lawyers. And the reason is that private and public companies are much faster and much more nimble compared to slow-moving bureaucrats.
Here are some of the Chinese solar panel producers’ methods for short circuiting the upcoming sanction:
Buy Solar Cells from Taiwanese Solar cell makers which have huge capacities without the competitiveness of the Chinese solar panel makers. Note: Taiwan does not have strong low cost integrated solar players like China. They also lack the heft of the South Korean chaebols like Samsung and LG. So they can be easily exploited by the Big Chinese Solar Companies.
They will set up factories in low cost locations in places like East Europe, Malaysia, and Mexico. These companies will export solar cells, then fabricate solar panels in these locations. Note: Most of the value addition isn’t done untill the solar cell stage with solar modules being mostly an assembly exercise. Setting up a 100 MW solar panel plant is also quite cheap these days.
They will set up solar factories in the US itself where they will import cells and make the modules.
The Chinese have already built massive inventory stocks of solar panels in the US. There was also a massive surge of solar panel imports in December which indicates that this strategy has already been employed.
Note: Solarworld, which has led the petition against the cheap Chinese solar panel imports has already filed an extension to include Chinese made solar cells as well.
Import Sanctions On Chinese Solar Imports Are Useless originally appeared in Green Chip Stocks. Green Chip Review is a free 2x-per-week newsletter, is the first advisory to focus exclusively on investments in alternative and renewable energies.