- The US imposed anti-dumping duties on Chinese solar imports in 2012 due to Chinese dumping and subsidization hurting the US solar industry. Duties ranged from 24.48% to 78.42% depending on the Chinese exporter. - This led Chinese solar imports to the US to decrease from $3.1 billion in 2011 to $1.5 billion in 2013, while Taiwanese imports increased as they were not subject to duties. - The duties benefit the US industry in the short term by preventing losses but increase costs and hurt achieving grid parity in the long term by increasing solar prices. However, they provide stability for the US industry to grow and compete.

1. Anti-Dumping duties on solar
products of China by US
- AN ECONOMIC ANALYSIS

2. Dumping of solar products in USA by china
• With a view to takeover solar industry in USA china started dumping
solar cells, solar modules and solar panels.
• Chinese companies are also subsidized by their government. Because of
dumping many solar products manufacturers in US shut downed their
companies.
• In response to this many companies filed petition against china solar
cells exporters in 2011.

3. Policy response of government of US : Anti-Dumping
• US Commerce starts investigations and laid anti-dumping duty of
24.48% (on average) on Chinese solar cells imports from December,
2012.
• US solar imports from china decreased to $ 1.5 billion which was half of
value of imports in 2011.
• But increase in value of solar products imports from Taiwan is more
than doubled to 657 million dollars from 2011 to 2013.
• This is because anti-dumping duty was levied only on China
manufactured solar cells and Chinese producers make use of Taiwanese
solar cells.

4. Effects of initial anti-dumping duty in 2012
• Because of initial anti-dumping
import value (USD) from china
decreased, with a parallel
increase in import value (USD)
from Taiwan.
China 2011 2012 2013
Volume(units) 93,471,000 47,031,000 32,981,000
Value (USD) 3,124,578,000 2,082,753,000 1,494,531,000
Taiwan 2011 2012 2013
Volume(units) 21,921,000 41,125,000 16,040,000
Value (USD) 256,560,000 513,498,000 656,777,000

5. Policy response of government of US : Anti-Dumping
• Again US solar companies filed in December, 2013. US Commerce finds
out that there is severe material injury to solar industry in US.
• Anti-dumping duty on Chinese imports now ranges from 26.8% to
78.42% and duties on Taiwanese solar products imports ranges from
12% to 28%.

6. Benefits of anti-dumping duties:
• In short run this prevents US solar cell manufacturing companies from
losses.
• In Long run this duty prevents from monopolizing solar industry in
US with Chinese solar products and make American solar products
manufacturers competitive

7. Costs of anti-dumping duties:
• Because of imposing duty on solar cells supply curve shift upward and price of
solar cells increases.
• Due to increase in prices cost of production in some segments in solar
industry such as rooftop solar companies, utility scale solar developers and
public utilities.
• Low prices are not only a consequence of dumping but due to efforts of
industry to attain grid parity. Grid parity is a situation when an energy source
can produce electricity at a price equal to electric grid. Because of anti-
dumping as cost of production increases companies in solar power industry
are unable to achieve grid parity. In addition to this, decrease in oil and
natural gas prices, which decrease cost of production of grid electricity, makes
solar power industry less competitive.

8. Costs of anti-dumping duties:
• All this leads to decrease in producer and consumer surplus.
• This not only affects solar products industry but also increases cost of
production for companies which use solar power.
• Because of increase in cost of production supply curve shift upward
and total surplus for consumers and producers decreases from ACE to
ABD. Here there is a dead weight loss of government revenue-DEBC.

9. Alternatives – price floor
One alternative is to set a price floor.
If price floor is set then total surplus for producers and consumers
decreases from ACE to ABFE and a dead weight loss of BFC. But here
there is not tax revenue to government in this case.

10. Conclusion
Even though there are so many costs associated with anti-
dumping duty in short term, these duties stabilize domestic market ,
make them grow and make American solar products industry
competitive.