Yesterday Trina Solar – one of the world’s biggest PV panel manufacturers – announced a net loss of $92.1 million for Q2 2012, more than tripling its loss from the first quarter.
This news comes a day after China’s Ministry of Commerce accused the U.S. of illegally subsidizing six renewable energy projects, violating World Trade Organization agreements.
According to the New York Times, deputy director for solar products at the China Chamber of Commerce for Import and Export of Machinery and Electronic Products Chen Huiqing said Chinese PV panel makers “face challenges of decreasing margins, decreasing exports, lack of capital, protectionism and an external environment that continues to deteriorate.”
These sentiments were echoed in a statement from Trina Solar CEO Jifan Gao, who attributed the net loss to declining solar panel prices, caused by “industry overcapacity and demand constraints.”
Gao noted “uncertainty caused by changes in the system of feed-in-tariffs in markets such as Italy, the influence of potential anti-dumping tariffs in the United States, inventories due to project delays from U.S. customers that made purchases under the U.S. federal government’s 1603 Program” as key factors that dampened demand.
Major Chinese PV manufacturer Yingli Solar's 2MW installation in Salerno, Italy. Credit: Yingli Solar
These poor Q2 results come in the midst of an extended trade war that has resulted in the U.S. imposing tariffs of up to 250 percent on Chinese PV imports – a move the U.S. Commerce Department says will level the playing field for U.S. producers.
Just last month, a group of EU producers filed a similar complaint with the EU Commission, seeking anti-dumping and anti-subsidy tariffs on Chinese PV imports. The EU is a much larger market for Chinese exports, meaning Chinese firms could face even bigger challenges if the complaint is investigated.
Meanwhile, Chinese firms have lodged a complaint with their own Ministry of Commerce, charging that U.S. firms are selling polysilicon in the Chinese market at below-cost prices. And Monday’s announcement accusing the U.S. of unfairly supporting renewable projects is a further sign that the Chinese government is considering fighting back in this trade brawl.
But while the Ministry said the U.S. had broken WTO trade rules, it did not indicate whether these complaints would be formally brought to the WTO dispute settlement body.