Top Green Party Member Suggests Import Restrictions for Chinese Solar Panels

German solar manufacturers are not only facing government proposals to cut solar feed-in tariffs, they also have to compete with imports of cheaper solar modules from China. Boris Palmer, the mayor of the city of Tübingen and a leading member of the opposition Green party, now suggests limiting imports from China to support the German solar industry.

According to Mr Palmer’s proposal, Chinese exports would only be allowed to the extent China installs solar modules at home.  If for instance China installs 5% of all solar panels worldwide, Germans could import modules up to 5% of the Germany market share.

His proposal has to be seen in the light of high costs for promoting solar energy in Germany. Fixed feed-in tariffs are paid for solar as well as other renewable energy sources pursuant to the Renewable Energy Sources Act (EEG). The tariffs are paid by the grid operator, but passed on to the end consumer according to a complex calculation process called “EEG reallocation” (EEG Umlage). The EEG reallocation is estimated to amount to EUR 8.2 billion in 2010, or 2.047 ct/kWh, at an assumed spot market average price of 5.37 ct/kWh.

About two in three solar modules installed in Germany are produced abroad. In December 2009 Stuart Brannigan, head of European operations of the Chinese solar manufacturer Yingli Green Energy, said that German manufacturers offer solar panels for EUR 1.60 per Watt, while their Chinese competitors demand EUR 1.30 to 1.40 per Watt.

All the same, Joachim Pfeiffer, energy expert of the Christian Democratic Party (CDU), rejected Mr Palmer’s proposal, saying it would violate WTO rules. “As a big exporter, Germany has always advocated for free trade and depends on fair trade”, he said. His FDP colleague Michael Kauch agreed. “Import limits in this case, could have a negative impact for the German export of other products”, he added.

Solar expert Ulrich Kelber of the opposition Social Democrats (SPD) said German solar companies had to live with competition. Punitive tariff duties were only an option if there was evidence that Chinese manufacturers used unfair trade practices, which was not the case.

Bundesverband Solarwirtschaft (BSW Solar), the interest group of the German solar energy industry showed itself confident that the German solar industry would rise to the challenge and be ahead of competition. With its roughly 50 institutes for solar research in Germany and its leading mechancial and plant engineering industry, the country was well prepared, BSW Solar said. However, CDU energy expert Pfeifer is sceptical, saying according to BSW Solar R&D expenses only amounted to 1.7% of the turnover of the member companies, while other high-tech companies had a ratio of 12% and the electronics industry had a ratio of 5%. He recommended greater R&D spendings.

Source: Der Spiegel

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