Tariffs on solar panels from China would raise prices

US tariffs on solar panel imports from China would raise photovoltaic prices more than 25% and sharply cut new solar power installations, according to a new report funded by opponents of possible tariffs.

The Brattle Group, a Cambridge, Massachusetts-based economic consulting and analysis firm, modeled the impact of tariffs on Chinese PV modules at the request of the Coalition for Affordable Solar Energy, a group mainly composed of solar power developers, as well as a handful of China-based solar panel manufacturers.

Tariffs would "slow the growth in domestic demand for photovoltaic systems by homeowners, commercial establishments and power producers, resulting in substantial job losses," the report said.

Hillsboro, Oregon-headquartered SolarWorld and six unnamed US solar-panel makers have filed antidumping and countervailing duty petitions alleging that Chinese solar panel makers received illegal subsidies from the Chinese government, allowing those firms to dominate the solar market.

SolarWorld, a subsidiary of German solar panel giant SolarWorld AG, is requesting that the US impose tariffs of up to 250% on Chinese solar panel imports to counteract the alleged subsidies. The case only includes crystalline polysilicon panels, not thin-film modules.

The Brattle Group modeled tariffs of 50% and 100% on Chinese solar panels and found a sharp impact on demand and pricing.

Brattle estimated that a 100% tariff would decrease total demand for solar installations to 3,159 MW by 2014 from 4,894 MW, while a 50% tariff would cut demand to 3,350 MW by 2014.

The price impact of tariffs would also be significant, according to the study. Residential modules, for example, would rise from 85 cents/watt in 2012 without a tariff to $1.07/watt with a 50% tariff and $1.17/watt with a 100% tariff. The study predicted higher tariff rates would have little additional impact, since "China is already effectively priced out of the US market at the 100%-tariff level."

The report also predicted the tariffs could lead China to retaliate against the roughly $863 million of polysilicon the US exports there.

The Commerce Department is scheduled to make a preliminary ruling on the case March 2, a spokeswoman for Commerce's International Trade Administration said Friday.

The International Trade Commission, which also must rule on the trade case, issued a preliminary decision in December in favor of SolarWorld, although China's solar companies strongly disputed the charges. China's government has threatened to take unspecified action against US firms if the US imposes tariffs on solar panels made there.