The U.S. Department of Commerce (DOC) announced its preliminary determination that countervailable subsidies are being provided to producers and exporters of certain crystalline silicon photovoltaic products (Products) from the People’s Republic of China (PRC).  This preliminary finding signals the future imposition by the DOC of countervailing duties (CVD) on subject Products pursuant to section 703(b)(1) of the Tariff Act of 1930, as amended, and has resulted in the DOC instructing the U.S. Customs and Border Protection (CBP) to require cash deposits based on the preliminary subsidy rates (discussed below).

The investigation into alleged countervailable subsidies was initiated on December 31, 2013, when SolarWorld Industries America, Inc. filed a petition with the DOC seeking the imposition of CVD on certain solar products from the PRC.  The DOC began a formal investigation on January 22, 2014.  On February, 14, 2014, the U.S. International Trade Commission issued a preliminary determination that “there is a reasonable indication that an industry in the United States is materially injured by reason of imports of certain solar products from, inter alia, the PRC.”  

For the purposes of the DOC’s CVD investigations, countervailable subsidies are financial assistance from foreign governments that benefit the production of goods from foreign companies and are limited to specific enterprises or industries, or are contingent either upon export performance or upon the use of domestic goods over imported goods.

The Products covered by this preliminary determination are crystalline silicon photovoltaic  (c-Si PV) cells, and modules, laminates and/or panels consisting of c-Si PV, whether or not partially or fully assembled into other products, including building integrated materials.  Subject Products also include modules, laminates and/or panels assembled in the PRC consisting of c-Si PV cells that are completed or partially manufactured within a customs territory other the PRC, using ingots that are manufactured in the PRC, wafers that are manufactured in the PRC, or cells where the manufacturing process begins in the PRC and is completed in a country other than the PRC.  Further, the subject Products include c-Si PV cells of thickness equal to or greater than 20 micrometers, having a p/n junction formed by any means, whether or not the cell has undergone other processing, including, but not limited to, cleaning, etching, coating, and/or addition of materials (including, but not limited to, metallization and conductor patterns) to collect and forward the electricity that is generated by the cell.

Excluded from the scope of the preliminary determination are thin film photovoltaic products produced from amorphous silicon (a-Si), cadmium telluride (CdTe), or copper indium gallium selenide (CIGS).

Also, excluded are any products covered by the existing antidumping and CVD orders on c-Si PV cells, whether or not assembled into modules, from the PRC and c-Si PV cells, not exceeding 10,000mm2 in surface area, that are permanently integrated into a consumer good whose function is other than power generation and that consumes the electricity generated by the integrated c-Si PV cell. Where more than one cell is permanently integrated into a consumer good, the surface area for purposes of this exclusion will be based on the total combined surface area of all cells that are integrated into the consumer good.

The DOC calculated preliminary subsidy rates of: (i) 18.56 percent for Changzhou Trina Solar Energy Co., Ltd. (which includes Trina Solar (Changzhou) Science & Technology Co., Ltd.); (ii) 35.21 percent for Wuxi Suntech Power Co., Ltd. (including its affiliates: Zhenjiang Rietech New Energy Science & Technology Co., Ltd., Zhenjiang Ren De New Energy Science & Technology Co., Ltd., Yangzhou Rietech Renewal Energy Co., Ltd., Suntech Energy Engineering Co., and Kuttler Automation Systems (Suzhou) Co., Ltd.); and (iii) 26.89 percent for all other producers/exporters in the PRC.

As stated above, the DOC has instructed the CBP to require cash deposits based on the preliminary subsidy rates mentioned above, which essentially amounts to an immediate tariff on subject Products, despite the preliminary nature of the DOC’s determination.  The final determination from the DOC will be issued on or about August 18, 2014, unless otherwise extended.