News Article
EU ProSun responds to dumping case in EC
No issue has split the Solar industry like the trade cases occurring around the world, and specifically against China, for the proliferation of cheap modules. EU ProSun who have been firmly for the trade actions have commissioned PwC to provide their own facts about the impact of tariffs.
Some European solar manufacturers who are represented by EU ProSun, expect EU anti-dumping duties on Chinese solar imports to have a clear positive effect on solar jobs and growth.
"The European solar industry is the global leader in technology and new innovations. If the European Commission acts now against illegal dumping by Chinese solar manufacturers, this industry can survive and prosper. If the EU does not act, EU ProSun predicts a Chinese solar monopoly with disastrous consequences for European manufacturers, suppliers and customers," said Milan Nitzschke, President of EU ProSun. EU ProSun refers in this context, among others, to a new study by Price Waterhouse Coopers (PwC).
The PwC analysis refutes the claims made by the Prognos study on the supposed impact of trade measures in the EU solar market. Chinese solar manufacturers, and a European front group of installers who use their products called AFASE, commissioned a study by Prognos which made a number of scientifically unsupported claims, for instance, estimating potential job losses exceeding the actual total number of direct and indirect solar jobs in some countries.
Author of the PwC study, Dr Wolfgang Nothhelfer said "˜The Prognos study contains major flaws in methodology and content, as well as contradictory evidence. The US imposed tariffs on photovoltaic products in 2012. As in Europe, a study commissioned on the possible effects of tariffs forecast an alarming crash of demand and job losses in the US. However, after the introduction of tariffs, demand increased and 14,000 new solar jobs were created. We should not believe alarming studies which are based on vague data and questionable assumptions. Indeed it is reasonable to conclude that the introduction of tariffs will have a net positive effect on employment in Europe.'
Difference of opinion
EU ProSun fully endorses the PwC analysis of the implausibility of the Prognos study. For instance, Prognos themselves co-authored a study which estimated a total of 87,800 direct and indirect solar jobs in Germany in 2012. However, their new 2013 study argues that duties may result in the loss of up to 98,000 jobs, thus over 10,000 more jobs that actually exist in Germany. Furthermore, Prognos predicts net job losses of 38,600 in 2015 in the UK, however, according to published data there were only 10,000 people directly or indirectly employed in the PV industry in 2011.
Prognos even claims that duties on Chinese solar products would lead to a loss of 242,000 jobs from a total of 265,000 solar jobs in Europe, according to the European Solar Industry Association (EPIA). EU ProSun utterly rejects such false claims and, in line with the US experience and PwC analysis, expects jobs and growth to increase in the EU solar sector when trade measures are imposed. Currently, due to disastrous effects of Chinese dumping on European support schemes, the number of new installations is heavily dropping, which already cost 15,000 jobs in solar manufacturing as well as thousands of jobs in installation and supply. When fair competition is restored, this destructive process will be stopped leading again to creation of new employment opportunities in the solar industry.
"˜EU solar production and transport costs are lower than in China. We have the most advanced solar industry in the world here in Europe. Chinese prices are low because of illegal state subsidies and massive dumping as shown by the US government investigation. Only antidumping measures can prevent the creation of a Chinese monopoly, which would lead to higher prices, less innovation and even further job losses in Europe. With measures, EU ProSun predicts restoration of fair competition and renewed sustainable growth of the European solar market', commented Milan Nitzschke, President of EU ProSun.
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Additional Info:
PwC was engaged in the context of the current investigation of the European Commission in the solar industry to report on the EU solar photovoltaic market and in particular on the claims made in the Prognos study with regard to the consequences of tariffs. The following provides a short summary of the main conclusions.
The results of the Prognos study are implausible
Higher job losses than total number of jobs: In the Prognos study, estimated job losses exceed in several instances the total number of existing jobs in the solar industry.
The unexplained increase of the number of allegedly lost jobs: The first results of the Prognos study, which were presented to the public in November 2012, announced considerably fewer job losses than the results made available to the public in February 2013. By then, the number of estimated job losses was suddenly several times higher than in November 2012.
The US experience - Anti-dumping tariffs and job growth: The US imposed tariffs on PV products in 2012. There was also a study commissioned in the US on the possible effects of tariffs that forecasted alarming job losses. However, after the introduction of tariffs demand increased and more jobs were created. This is a useful example to illustrate that there are good reasons not to believe alarming studies which are based on vague data and questionable assumptions.
There are major flaws with regard to methodology and content:
ï‚£ Central elements of the analysis like the elasticity of demand
remain completely unclear
ï‚£ Several offsetting factors that reduce the impact of tariffs on
demand were not taken into account
ï‚£ The assumption that volumes of production inputs
exported from Germany to China will remain constant is
highly questionable
ï‚£ The Prognos study does not meet the standards for
economic evidence set out by the Commission and
therefore should not be taken into consideration
ï‚£ Relevant aspects for a holistic assessment of the impact of
tariffs on photovoltaic products
There are many factors to consider when estimating demand and employment effects of tariffs in the solar industry, and the Prognos study does not provide a transparent and objective evaluation of those factors.
A recovery of the European PV manufacturers combined with cluster effects along the PV value chain and other related sectors, as well as effects on innovation have the potential to generate a substantial amount of EU value added and employment, and depend to a large extent on the introduction of tariffs. It is reasonable to conclude that these beneficial effects of tariffs more than outweigh limited negative effects on demand, i.e. that the introduction of tariffs has a net positive effect on employment in Europe.
