U.S. solar panel prices are set to rise in the short term due to last month’s imposition by the Obama administration of 31% tariffs on some Chinese panels, two of China’s largest solar companies said Tuesday.
The tariffs, however, are unlikely to significantly hit Chinese companies that have diverse global supply chains and production capacities outside China, said executives of Suntech Power Holdings, the world’s largest manufacturer of photovoltaic solar panels, and JinkoSolar Holding Co. Ltd.
The comments come after the U.S. government last month imposed 31% tariffs on some solar panels produced in China alleging they had been dumped, or sold below cost.
“We will see some price increases in the short-term” for solar panels in the U.S., JinkoSolar’s Marketing Director Isabelle Christensen said on the sidelines of the Intersolar industry exhibition in Munich.
She said that there will be a time lag befor the increases kick in, as solar installations in the U.S. in the first half of the year are usually driven by sales at the end of the previous year. A study by the Solar Energy Industries Association and GTM Research, published this week, predicts the U.S. market for solar panels is likely to double in 2012, although tariffs could contribute to slower growth in 2013.
Christensen said that the immediate effect on JinkoSolar should remain limited, given that it entered the U.S. market only in the middle of last year.
Suntech’s Chief Commercial Officer Andrew Beebe said that the company has been anticipating the tariff decision.
“We..have adjusted our supply chain and managed to keep the resulting production cost increases relatively low at between 1% and 2%,” Beebe said. “We will never import a product to the U.S. that is subject to tariffs.”
Suntech last month reported a fourth consecutive quarterly loss, which it partially attributed to provisions made for the U.S. anti-dumping duties.
Beebe also said that there could be price increases “or perhaps a slower rate of price declines” for solar panels in the U.S. from the second half of 2012.
The anti-dumping case was initiated by Germany’s SolarWorld AG , which operates one of the largest solar factories in the U.S.
SolarWorld is also seeking similar tariffs in the European Union.
Suntech’s Beebe said that the company has been preparing for any such move.
In the longer-term the U.S.’s anti-dumping tariffs could have more negative knock-on effects and increase pressure for solar manufacturers to further reduce operating costs, Suntech and JinkoSolar said.
Both executives said that production costs are set to rise as the industry adjusts to the new situation.