Advanced Solar Photonics, an American manufacturer of photovoltaic equipment and provider of turnkey alternative energy systems, has seen orders for its PV modules skyrocket with the determination by the U.S. Department of Commerce that China-based solar companies have been dumping products on the US market.
Announced May 17, the anti-dumping investigation of imports of photovoltaic cells found China-based solar companies guilty of selling their products in the US market at prices 31% below cost. The ruling has sent the US solar market into chaos, with many solar developers and installers looking to shore up supply from American solar equipment manufacturers ahead of the imposition of countervailing duties expected later this year.
While the company’s sales of photovoltaic equipment were robust prior to the announcement, ASP’s weekly sales volume has doubled since the Commerce ruling. “The most important thing to know about the ruling is that it will have no impact on the prices we charge for solar equipment,” said Henry Roberts, Director of Strategic Accounts. “While our panels have always been the lowest-priced US product on the market, we’ve never sold equipment below cost.”
Dumping -- selling product below cost -- has a negative impact on any industry in the medium and long term, because once the manufacturers engaging in predatory pricing have eliminated the competition they are free to raise prices to the maximum level the market will bear. While ASP’s prices won’t increase as a result of the ruling, “capacity could become an issue later in the year,” said Roberts. “Honestly, we’re a bit surprised by the spike in demand.” ASP’s current panel manufacturing capacity is 130 MW per year. The company is currently in the process of raising additional capital to support its capacity expansion.
ASP’s executive management is working closely with investors to help correct a common misunderstanding – that panel production in China costs less than panel production in the United States. Although the cost of labor in China is significantly lower than in the United States, the cost of solar panels is largely a function of raw materials prices, the most important of which – solar silicon – is manufactured predominantly in the United States. In fact, the cost of materials comprises about 90% of the total cost of the panels, while the cost of labor makes up only about 5%. This means any competitive advantage China-based panel manufacturers enjoy due to low labor costs is more than offset by the increased transportation costs of shipping materials and finished goods across the Pacific Ocean.
Although ASP’s panel production costs are at par with its China-based competitors, the company does have several other competitive advantages that have catapulted the company to its leading position in just two short years. Among these are its product quality and its product range – the company is one of only a few global manufacturers that produce 400 Watt panels as well as its own photovoltaic racking systems. The company is part of a vertically-integrated group that also provides system integration and alternative energy supply services.
Source: Advanced Solar Photonics
Date: May 24, 2012