The United States Department of Commerce (DOC) released its preliminary determination in the countervailing duty investigation on imports of silicon photovoltaic (PV) cells from China last week.  The DOC preliminarily found subsidy rates for Chinese producers and exporters of PV cells ranging between 2.9 to 4.73 percent—rates that were lower than some industry members reportedly expected, and lower than the rates alleged by the Solar World Industries America Inc., the U.S. producer that petitioned for this countervailing duty investigation and the companion antidumping investigation.  The DOC affirmed Solar World’s allegation of “critical circumstances,” resulting in retroactive application of the countervailing duty deposit requirement on imports of Chinese PV cells beginning in December 2011.

The DOC also clarified that the scope of the ongoing antidumping/countervailing duty investigations covers PV cells and modules produced in China as well as modules produced elsewhere with Chinese PV cells, but does not include modules produced in China from PV cells produced elsewhere.

Countervailable subsidies are receipts of financial assistance by producers and/or exporters from their local or national government that benefit the production or exportation of goods where such benefits are limited to specific enterprises or industries, or are contingent either upon export performance or upon the use of domestic goods over imported goods. 

U.S. imports of Chinese solar panels in 2011 were valued at over $2.5 billion – a significant and growing share of the total U.S. market.  The rapid growth of Chinese imports in fact supporting the “critical circumstances” finding noted above as well as the earlier preliminary determination by the U.S. International Trade Commission (ITC) that the U.S. industry is being injured by imports of PV cells from China. 

Interested members of the solar industry will continue to watch these proceedings closely.  The DOC is expected to announce its preliminary determination in the companion antidumping investigation in May.  The final countervailing duty determination is due to be issued in June, and the ITC will issue its final injury determination in July, though these dates could be postponed.  Interested parties also are closely monitoring the U.S. and global market implications of these investigations, including in the large solar market in Europe, where reports indicate similar trade relief actions against Chinese exports might be under consideration.