Solar ETFs, which were shining brightly since the start of this year, took a beating lately on apprehensions over higher import duties on Chinese solar panels and other related products. The U.S. Department of Commerce announced last week that duties of 18.56% to 35.21% would be levied on cheap Chinese products in an attempt to boost the U.S. solar market and level the playing field.
Prior to this, in 2012, the Commerce Department levied anti-dumping duties of 25.96% and countervailing duties of 15.24%. Tariffs were only applied to the cells used to make the panels. The added burden stems from the unfair subsidies that Chinese manufacturers are offered by their government. The duties will now be enforced on both cells and final solar panel products.
The decision is linked to one of the prime charges by SolarWorld Industries America, a German solar manufacturer with major operations in the U.S. The allegation says that Chinese solar product makers are enjoying the undue advantage of escaping the duties that were enforced by the Department of Justice in 2012.
The duties now await the commerce department’s confirmation on or around August 18 which will undergo a review program for 45 days by the US International Trade Commission until the final mandate is passed around October 3.
Winners & Losers
While this news came as a boon to the U.S. solar companies including First Solar Inc. (FSLR), SunPower Corp. (SPWR) and SunEdison Inc. (SUNE), Chinese companies like JinkoSolar Holding Co., Ltd. (JKS ), Yingli Green Energy(YGE) and Trina Solar Inc. (TSL) were punished badly (read: Solar ETFs Shine on Trina Solar Earnings Beat).
Overall, TSL, YGE and JKS lost 4.5%, 4.1% and 7.5% following the news, while FSLR, SPWR and SUNE added 3.9%, 6.9% and 6.1% respectively, though the U.S. stocks too started to slump lately, probably on concerns that purchase of solar panels by domestic sources will become costlier now and curtail demand.