BRUSSELS/BEIJING, Sept 14 A sharp increase in
solar power production in China and a sharp fall in domestic
demand have sparked a sudden surge of cut-price exports,
undermining a China-EU agreement to limit damage to European
China produced 27 gigawatts (GW) of solar photovoltaic (PV)
modules in the first half of 2016, an increase of 37.8 percent
and installed 20 GW of new solar power capacity in the same
period, three times as much as the same period a year ago.
However, demand has since tailed off. Solar projects
operational since July face a reduced price paid by grid
operators for their power. The China Photovoltaic Industry
Association (CPIA) has forecast total new capacity by the
year-end will be 30 GW, implying just 10 GW in the second half.
EU ProSun, an association of EU solar producers, says the
price of some panels had fallen to below 0.40 euros per watt,
compared with a previous average European price of about 0.50
EU ProSun president, Milan Nitzschke, said that prices had
come down by some 20 percent in the past month to below the cost
"We fear a second wave of bankruptcies," he said.
The European Union and China were on the verge of a trade
war in 2013 over EU allegations of dumping of solar panels into
the bloc. The investigation was the largest in EU history, given
the value of such exports was 21 billion euros ($23.6 billion)
That trade war was averted by agreeing a lower amount of
Chinese panels could be imported free of tariffs as long as they
did not price them below a minimum initially set at 0.56 euros.
However, having signed up to the undertaking, an increasing
number of Chinese firms have chosen to opt out considering it
better to sell at even cheaper prices, even when faced with
duties of between 27.3 and 64.9 percent.
JinkoSolar Holding Co became the latest to withdraw
from the undertaking last week, saying the minimum price no
longer reflected the market reality.
Maggie Ma, chief financial officer of Renesola,
another company no longer part of the undertaking, forecast that
the third quarter would be "sluggish" after China cut
Miao Liansheng, chairman and CEO of Yingli Green Energy,
said in the company's first-half report that it faced challenges
and lower selling prices in the second half because of
increasing competition and higher anti-dumping duties in the
($1 = 0.8907 euros)
(Reporting by Philip Blenkinsop in Brussels and David Stanway
in Shanghai; Editing by Ed Davies)