In the face of US increases in tariffs for dumping on Chinese solar cells provoked by the Commerce Department's finding that Chinese companies had been selling cells in the US below their manufacturing cost (dumping), China has begun an investigation which could lead to increased Chinese tariffs on polysilicon imported from the United States. The tariffs imposed in the U.S. case were as much as 250%. It's hard to see how the Chinese complaint can stand on the facts as there have been significantly lower demand in China and subsequent over-capacity for polysilicon. Polysilicon recently traded at a little over $20 per kilogram – a decline of 26% this year.
China's huge investment in solar has resulted in enormous solar cell over-capacity world-wide. Both the US and China (and a number of other countries) have major interest in energy independence from the Middle East and other volatile areas. However, demand has slowed due to subsidies having been cut in a number of regions. The result has been a depression in the solar cell industry, especially for manufacturers in China where stock prices for the big players are down by nearly half. It remains to be seen whether the struggles of the solar industry will be resolved by tariffs, increased subsidies or the marketplace shaking itself out – if prices for cells are low enough subsidies should not be needed. Time and the seemingly more combustible Middle East will tell.
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