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China's New Solar Price

European settlement of trade dispute, though a capitulation, does set a price floor

2 min read
China's New Solar Price

A decade ago, when IEEE Spectrum was preparing a special issue on China's tech revolution, a colleague sitting in an airplane heard somebody behind her exclaim, "But what's the China price?" What he was asking, like everybody in business then and since, was what the Chinese were charging for products in his particular line.

Since Saturday, when the European Union settled a solar trade dispute with China on terms favorable to the People's Republic, we at least seem to know, more or less, what the global floor price for photovoltaics will be in the near future: 56 euro cents per installed watt of photovoltaic cell, or roughly US $0.75/W.

The EU settlement of a trade complaint brought by European PV manufacturers led by Germany's SolarWorld does not impose sanctions or tariffs on China. It does not satisfy the complainants and is seen as weak—typical of Europe's failures to advance its global interests with sufficient resolve. But that's geopolitics, which is a story for another day.

What's of interest here is the settlement's setting of a solar price that's well below the one-dollar-per-watt mark, often considered the breakeven point for PV market competitiveness. It will "allow Chinese companies to export to the EU up to 7 gigawatts per year of solar products without paying duties, provided that the price is no less than 56 cents per watt," as the Financial Times put it in its report. That is, Chinese producers will be permitted to collectively export 7 GW of solar cells to Europe each year—an amount equal to more than half of Europe's solar market—without incurring trade penalties. ("A trade deal with the European Union gives China 60% of the EU's solar-panel market," concludes a video interview on the Wall Street Journal site.)

The 7-GW ceiling on Chinese PV exports to EU states is essentially voluntary: Any exporters exceeding that limit will pay tariffs averaging 47.6 percent, as of August 6. That would seem to almost guarantee that Chinese exporters will not sell to Europeans at a price below 56 euro cents per watt. And, as Europe represents such a large fraction of the global solar market, the global PV floor price will be approximately the same.

In the short run, however, the effect of the European settlement may be that the Chinese will dump PV cells in the U.S. market at an even lower price. That is the opinion of Keith Bradsher, China correspondent for the New York Times, who previously did outstanding reporting about the crisis in the U.S. auto industry and the festering troubles of Detroit.

Photo: William Hong/Reuters

 

The Conversation (0)
This photograph shows a car with the words “We Drive Solar” on the door, connected to a charging station. A windmill can be seen in the background.

The Dutch city of Utrecht is embracing vehicle-to-grid technology, an example of which is shown here—an EV connected to a bidirectional charger. The historic Rijn en Zon windmill provides a fitting background for this scene.

We Drive Solar

Hundreds of charging stations for electric vehicles dot Utrecht’s urban landscape in the Netherlands like little electric mushrooms. Unlike those you may have grown accustomed to seeing, many of these stations don’t just charge electric cars—they can also send power from vehicle batteries to the local utility grid for use by homes and businesses.

Debates over the feasibility and value of such vehicle-to-grid technology go back decades. Those arguments are not yet settled. But big automakers like Volkswagen, Nissan, and Hyundai have moved to produce the kinds of cars that can use such bidirectional chargers—alongside similar vehicle-to-home technology, whereby your car can power your house, say, during a blackout, as promoted by Ford with its new F-150 Lightning. Given the rapid uptake of electric vehicles, many people are thinking hard about how to make the best use of all that rolling battery power.

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