Conergy, Solarworld Seek Protection From Chinese Price Dumping

German solar companies Conergy AG and Solarworld AG want their government and the European Union to discourage renewable energy investors from buying Chinese panels and cells they say receive improper support.
Chinese prices “border on dumping” and those levels are impossible to maintain without state aid, Dieter Ammer, chief executive officer of Conergy, was cited as saying in Handelsblatt today. Alexander Leinhos, a company spokesman, confirmed the comments. The EU should implement import tariffs to protect its solar industry, Ammer added.
Prices and demand for solar products have dropped this year as recession-struck photovoltaic power plant builders struggle to fund projects and a colder European winter caused residential clients to shy away from installing panels on their roofs. Solar module and cell makers will have to boost output in low-cost regions to be competitive in the future, Goldman Sachs Group Inc. analysts wrote this week in a note.
“They’re playing with fire, it could have big consequences for the industry,” said Karsten von Blumenthal, an analyst with SES Research GmbH in Hamburg. “The Chinese are helping to make solar power competitive by making equipment cheaper.”
Germany’s BGA exporters group said in June that rules obliging Chinese and U.S. manufacturers to give preference to local products and services are “poison” for the recovery of the world economy.
‘Raise Concern’
China’s solar industry subsidies “raise concern,” given the scarcity of foreign companies selected as suppliers for projects, von Blumenthal said. The measures Ammer and Solarworld CEO Frank Asbeck suggest may help non-Chinese companies profit from that program, he said by phone today.
The Chinese Ministry of Finance said last month that it will “in principle” provide subsidies amounting to 50 percent of the total investment in solar power projects. That contrasts with Germany, where the government pays generators fixed sums for the electricity they feed into the nation’s grid.
Solarworld’s CEO says his Chinese rivals could hold out selling at a loss for another two to three years, thanks to interest free credit from the country’s government and lenders.
Asbeck is in favor of Germany only subsidizing power from panels where more than 50 percent of the manufacturing process took place in the EU. That would mean solar cells could be made in Asian countries and assembled in Europe, he said by phone from Bonn.
Falling Sales
Solarworld’s sales fell 6 percent to 401.6 million euros ($575 million) in the first half, while the industry’s prices slumped about 25 percent, the company said in July.
Germany, as the world’s biggest exporter, has suffered as the global financial crisis damped demand for German goods, forcing manufacturers to curb production and cut jobs. Q-Cells SE, the country’s largest solar company, said Aug. 13 that it will shut down production lines in its hometown of Thalheim, resulting in the loss of about 500 jobs.
Von Blumenthal at SES Research recommends investors sell Q- Cells and Conergy stock and buy shares in Solarworld, the third- largest German solar company.

Source: Bloomberg.com