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Environment

'China wants a solar monopoly'

Photovoltaic manufacturers in Europe are suffering due to China's solar subsidies says Milan Nitzschke. He started the lobbying of the European Commission to put punitive tariffs on Chinese products.

Deutsche Welle: Mr Nitzschke, what are your accusations against the Chinese government?

MilanNitzschke: China's government has financed the domestic solar industry to the tune of 200 billion euros in the last few years. That's how 'dumping' prices, or prices below the manufacturing costs, are achieved. No-one can compete against that in the whole world. Anyone who sells for below cost is making a loss with every sale. Most companies can't afford to do that. In China though, the state keeps pumping money into the system, that's how China has already almost managed a solar industry monopoly.

What exactly is the Chinese government doing?

It starts with direct subsidies to the factories, which receive all their electricity for free. What's really interesting is the credit being offered by the state-owned banks. There are estimates which say that none of the top five solar companies from China would even be in existence, if it wasn't for the credit being offered by the Chinese banks.

A visitor photographs solar panels at a new solar power field near Cottbus, in Germany (Photo: AP Photo/Eckehard Schulz)

Some 80 percent of all solar panels in Germany are now made by Chinese manufacturers

How much more expensive would the products from China be, without these subsidies?

They would be almost twice as expensive. That would then match up with the actual costs of manufacturing. At the moment, Chinese manufacturers sell their products for 30 to 50% less. The rest is a loss, which is carried by the Chinese government.

Will European solar panels be competitive if these subsidies are stopped?

On a technical level, the European products are definitely competitive. We have the most automatized manufacturing processes. Everything that is used for manufacturing in China, was already being used in Germany and was developed here. We are absolutely competitive – but only if we are competing against companies, and not against the Chinese state.

The European solar industry is really suffering due to company bankruptcies. Will the tariffs still really help now?

For those that have already closed their factories, the tariffs have come too late. For the others, the tariffs are just coming at the right time. In the whole solar industry nothing has been invested for the last one or two years, because no-one had any money. Definitely not in China because a production capacity has now been built up there which is twice as high as the worldwide demand. No-one would think of introducing new technology, building a factory or buying new production machinery.

Employees work on a solar panel production line at Suntech Power Holdings headquarters in Wuxi, Jiangsu province June 3, 2009.

Many Chinese solar panel production factories receive free electricity, according to Nitzschke

In Asia the solar industry is booming. Are China's neighbours also suffering due to their behaviour?

There are good manufacturers in South Korea, Thailand, Malaysia and India. Companies, like LG Electronics, which we know are doing good work. But even they have said that they can't compete against China's dumping pricing.

What China is doing is impacting the world solar market and it is destroying any type of infrastructure that existed in the industry. In the end, German and international customers will only have a choice between five or six Chinese products. But we want to have fair, international competition.

Why is China investing so heavily in this industry?

Chinahas recognized that the worldwide solar market is growing. They don't want to just be involved in the traditional technology areas. They also want to be involved with, and dominate, an industry with future growth opportunities. According to China, the solar industry should be taken over completely, before it develops into something bigger. Then, it will be hard to dominate.

Now there are these preliminary tariffs, what is the long term survival strategy?

These anti-dumping tariffs are not a punishment, they are just meant to establish an even playing field again. In fair competition we don't need to be concerned about any country's products, quite the contrary in fact. We have the most modern factories worldwide. We are working hard to sink our prices because we have great products. We are looking forward to measuring up against the best that the South Korean manufacturers can produce, on issues like quality and performance. But we are predicting good results for SolarWorld and for the whole European solar industry.

How would you describe the behavior of the German government in all of this?

Germany's Chancellor Angela Merkel (R) and China's Premier Li Keqiang speak as they stroll in the park of the German government's Meseberg Palace in Meseberg, some 60 km (37 miles) north of Berlin May 26, 2013 in this picture provided by the Bundesregierung. Picture taken May 26, 2013. Bundesregierung/Guido Bergmann/Handout via Reuters (GERMANY - Tags: POLITICS) ATTENTION EDITORS - THIS IMAGE WAS PROVIDED BY A THIRD PARTY. FOR EDITORIAL USE ONLY. NOT FOR SALE FOR MARKETING OR ADVERTISING CAMPAIGNS. THIS PICTURE IS DISTRIBUTED EXACTLY AS RECEIVED BY REUTERS, AS A SERVICE TO CLIENTS. NO SALES. NO ARCHIVES

China's Premier Li Keqiang visited Angela Merkel recently in Germany - partly to discuss solar issues

The German government has been quite diplomatic. My concern is that Ms Merkel and her government are not being taken seriously by China any more. If you say too early, 'We don't really want any tariffs, we just want to be friends' then, although that's a nice gesture, it won't help in getting China to take part in negotiations.

That's why I am pleased that the EU Commission is doing things differently. They have imposed tariffs and also now want to negotiate. But I am really concerned that, in the end, the Chinese – who currently have the richest economy in the world – will behave with Germany and other EU member states as they please, that they can break the law and won't be held accountable. If that happens it means that we are going to be dependant on China and that will, ultimately, affect all types of industries, not just the solar industry.

Milan Nitzschke is the spokesperson from German solar manufacturer SolarWorld and president of the European solar manufacturer initiative, Pro-Sun. Until 2007 Milan Nitzschke was CEO of the German Renewable Energy Federation (BEE) in Germany.

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