The solar trade war continues as U.S. regulators look into how U.S. solar companies are hurt by solar PV cells made in Asia. One of the companies which is most affected by this investigation is Trina Solar Limited (ADR) (NYSE:TSL). Shares of Trina Solar fell as much as 2% at the New York Stock Exchange in late morning trading as investors pondered the risks associated with investing in Chinese solar companies like Trina.
Next important date in solar trade war coming soon
The U.S. International Trade Commission recently voted unanimously to continue investigating Chinese and Taiwanese PV products. U.S. regulators say solar companies in China are dodging tariffs by making them in Taiwain and then shipping them to China to be assembled, thus avoiding tariffs on Chinese modules imported into the U.S. at less than fair value.
The next key date for solar investors is March 26, which is when the next determination is due. On that date, regulators will hold a preliminary countervailing duty determination. Then on June 9, anti-dumping duty determinations will be due.
Trina to lose, Sunpower to win
Citi analysts say although no one wins in a trade war, there will likely be some short-term winners and losers. Specifically, they say Trina Solar Limited (ADR) (NYSE:TSL) could be negatively affected by regulators’ decision. As of the end of the third quarter last year, the Chinese company had 19.2% exposure to the U.S. If a tariff is imposed, it could hamper the company’s U.S. shipments. The Citi team has a Neutral rating on Trina Solar.
Some possible winners in this solar trade war are U.S. solar panel makers Sunpower Corporation (NASDAQ:SPWR) and First Solar, Inc. (NASDAQ:FSLR). If those tariffs are levied, then they would improve the economics of both companies’ systems or modules in comparison with China-sourced products.
Solar settlement may be ahead
However, Citi analysts say the U.S. solar industry may also be negatively impacted if duties are levied. They believe that some sort of settlement will be reached eventually and that it will be similar to the one between China and the European Union last year. They note that the new deadline seems to leave “plenty of time” for the U.S. and China to come to some sort of agreement.
As a result, they don’t think the ultimate outcome will be “materially negative” for the solar industry as a whole. After all, the U.S. doesn’t want to “curtail domestic solar growth.”
