INDEX [ ] · Web viewPlease supply the details requested in Table A.1.1 and A.1.2 of the excel file about your company and legal representative, if any. Supply also a diagram outlining

European Commission questionnaire for IMPORTERS in the ongoing expiry / interim reviews into the anti-dumping and anti-subsidy duties and undertakings for solar modules and cells originating in or consigned from China / Clarification of the questions and explanation on how to respond

16 February 2016

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EUROPEAN COMMISSIONDirectorate-General for Trade

Directorate H - Trade Defence

QUESTIONNAIRE

COMPLETE THIS PART

(tick box as appropriate and enter company name)COMPANY NAME: LIMITED VERSION (1)

VERSION OPEN FOR CONSULTATION

THIS QUESTIONNAIRE HAS TO BE COMPLETED TWICE, ONCE AS A LIMITED VERSION AND ONCE AS A VERSION OPEN FOR CONSULTATION BY INTERESTED PARTIES – – SEE ANNEX I AND III FOR INSTRUCTIONS

Intended for: Importers not related to exporting producers of crystalline silicon photovoltaic modules and cells in the European Union

Country concerned The People's Republic of China

Product concerned: Crystalline silicon photovoltaic modules and key components (i.e. cells), originating in or consigned from the People's Republic of China ('solar cells and modules')

Investigation period (IP): 1 October 2014 to 30 September 2015

Statutory reference:Council Regulation (EC) No 1225/2009 of 30 November 2009 and Council Regulation (EC) No 597/2009 of 11 June 2009

Regulatory reference: Notices of initiation, OJ C 405/08, 405/09, 405/10, (5.12.2015) Internal registration

number: R629, R630 and R640

Deadline for response to the questionnaire:

As specified in the cover letter

Officials in charge:

HEAD OF SECTION: CASE HANDLERSPer Ake Aidemark+32 229 94347

Mariusz Hubski +32 229 99569Carl Ringberg +32 229 67589

1 Please note that confidential information falls under the term 'limited' according to the internal rules of the European Commission. Hence, only documents labelled 'limited' are considered confidential documents pursuant to Article 19 of Council Regulation (EC) No 1225/2009 (OJ L 343 of 22.12.2009, p.51) and Article 6 of the WTO Agreement on Implementation of Article VI of the GATT 1994 (Anti-dumping Agreement). Documents, which do not contain this label, are considered to be non-confidential documents pursuant to these provisions. Therefore, any replies which contain confidential information must be labelled 'Limited'.

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Kurt Galle +32 229 55532João Nunes +32 229 88049

Address: EMAIL: [email protected] European CommissionDirectorate General for Trade - Directorate HCHAR 04/039B-1049 Brussels, BELGIUM

Comment by SolarPower Europe:

The importer is the person who customs clears the modules / cells into the EU.

In the ongoing expiry review into anti-dumping, the European Commission will determine whether the solar modules / cells are sold to the EU at dumping prices during the Investigation Period from 1 October 2014 to 30 September 2015. In addition, in both the anti-dumping and in the anti-subsidy expiry, the European Commission will determine whether the landed price for the solar modules / cells from China after customs clearance in the EU are below the prices for EU solar modules / cells (= “price undercutting”) and below a target price for the EU solar modules / cells (= “price underselling” = cost of production of the EU modules / cells + target profit that was 10% in the initial investigation).

First, dumping = domestic sales price / costs > export price to the EU

PRC producer A sells to its affiliate B importing solar products into the EU ð export price =

resale price of B minus selling, general and administrative expenses of B minus a profit for B minus purchasing costs of B.

The actual profit margin of B is disregarded as not being arm’s length.

Instead, the profit margin of B may be based on the profit margin of unrelated importers. This is precisely what was done in the initial anti-dumping investigation and one of the reasons for the EU in the questionnaire below to ask the unrelated importer to disclose its profit margin.

The questionnaire below also asks for the post-importation costs of the unrelated importers. This is because these costs may be used to determine the landed price in the EU of the Chinese modules / cells for the calculation of price undercutting and price underselling mentioned above.

In addition, the data filed by the unrelated importers on purchases, sales and profitability and their arguments filed in the response to Sections C, D, E, G and H will be used to determine whether the duties and the minimum import prices of the undertakings have had a significant negative effect on the unrelated importers such that the duties / minimum import prices should not be maintained. For this purpose, the data filed in their responses by users to the questionnaire for users will also be considered.

Beware to file a confidential version of your response and a non-confidential version. This non-confidential version will be filed by the European Commission in its non-confidential file that is

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accessible to all interested parties in the ongoing investigation, i.e., all producers, importers, users and associations that have made themselves known to the European Commission. If you have any question on how to prepare the non-confidential file, SolarPower Europe will respond to your questions.

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INDEX

INDEX.................................................................................................................................

SECTION A - GENERAL INFORMATION......................................................................

SECTION B - PRODUCT CONCERNED..........................................................................

SECTION C - PURCHASES............................................................................................15

SECTION D – SALES AND PRICES..............................................................................16

SECTION E – EMPLOYMENT.......................................................................................17

SECTION G - PROFIT / LOSS SITUATION..................................................................17

SECTION H - OTHER QUESTIONS...............................................................................18

CERTIFICATION.............................................................................................................20

ANNEX I - INSTRUCTIONS...........................................................................................21

ANNEX II - GLOSSARY.................................................................................................24

ANNEX III - VERSION OPEN FOR CONSULTATION................................................26

ANNEX IV – DECLARATION ON COPYRIGHT.........................................................28

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SECTION A - GENERAL INFORMATION

1. Please supply the details requested in Table A.1.1 and A.1.2 of the excel file about your company and legal representative, if any. Supply also a diagram outlining the organisational structure of your company. The diagram should show all units involved in the sales and distribution of solar cells and modules as defined in section B below in the EU and export markets.

Response:

See Excel file A.1.1 and A.1.2.

2. Please give the name of your company’s ultimate controlling entity and list each shareholder that owned more than 5% of its shares during the IP in Table A.2 of the excel table. Where known, please give details of their activities.

Response:

See Excel file A.2.

3. Please provide the contact details of all related companies (see definition in the glossary) inside and outside the Union, which are involved in the product in question. Specify the activities of each related company and the percentage of shares owned.

Response:

…

Comment from SolarPower Europe:

As per the Glossary below and the EU’s definition for ‘related parties’ in the customs law, companies are related when any of the following is satisfied:

For the purpose of completing this questionnaire, natural persons or legal persons (i.e. companies) should be deemed to be related if:

(a) they are officers or directors of one another's businesses;

(b) they are legally recognised partners in business;

(c) they are employer and employee;

(d) any persons directly or indirectly owns, controls or holds 5% or more of the outstanding voting stock or shares of both of them;

(e) one of them directly or indirectly controls the other;

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(f) both of them are directly or indirectly controlled by a third person;

(g) together they directly or indirectly control a third person; or

(h) they are members of the same family.

This is also used to determine whether the importer is fully (directly or indirectly) unrelated from any affiliate to a Chinese producer of modules or cells. But, it is also used to determine whether data from any related company must be considered to determine the financial status of the company.

4. State how your company can be defined: importer - trader - broker - agent - other (specify) and explain briefly your main activities.

Response:

…


This is a bit of a strange question to the extent that the questionnaire is one for unrelated importers. Thus, the response should normally be that your company is an importer, i.e., a company that purchases modules and cells in its own name and for its own behalf, customs clearing the modules / cells in the EU. If you resell the product, then, indicate that you are also a trader. If you use the modules / cells for products or, in the case of cells, for the production of modules, you should state such. If you act as a buying agent and import the cells on behalf of your principal, please also state this.

5. Provide a list of all products produced and/or traded by your company.

Response:

[In addition to modules and cells, our company [produces and / or trades] …].

[Our company only imports and [produces and / or trades] solar modules and / or cells].


Please amend as fits your company.

6. Please state your accounting period and attach the audited accounts for all the years considered (2011-IP), i.e. balance sheet, profit and loss statement, auditor’s opinion and notes to the accounts along with the management accounts or internal management reports concerning the nearest sector of activity covering the product in question for each year of the period considered (2011-IP). In the

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event that your company's accounts have not been audited, attach the financial statements that are required by your country's business law.

Response:

Our financial year covers … to …

Our company’s audited financial statements including the auditor’s report and notes for the years ended in 2011, 2012, 2013 and 2014 and [2015] are attached in Exhibit A.6 hereto.

Our company has no management accounts for solar modules / cells or any business segment close to modules / cells. For the Investigation period from 1 October 2014 through 30 September 2015, our company attaches the internal monthly profit and loss statement of the company for the period concerned.


Please amend as fits your company.

7. Indicate whether your company itself labels and/or packs the purchased products, whether it uses a specialised company for labelling and/or packaging as a subcontractor or whether the product is sold as such.

Response:

…


Please respond as fits your company.

8. Please complete the turnover table in Table A.8 of the excel file, corresponding with and in the currency of your financial report.

Response:

…


If you had a financial year that ended within the period 1 October 2014 to 30 September 2015, you could provide the total company turnover figure that is shown in your financial statements for that period. Alternatively, you can also provide the total company turnover figure for the calendar year that ended on December 31st in 2015. In addition provide the

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total company turnover figure for the period 1 October 2014 to 30 September 2015.

If you resold the modules or cells as such, provide the turnover figure obtained through these resales.

If you did not resell modules or cells as such but used the cells for the production of modules or used the modules for the resale of projects, then, provide the turnover figure for the modules or projects in which they were used.

SECTION B - PRODUCT CONCERNED

Scope of the Investigation

The product covered by this proceeding is crystalline silicon photovoltaic modules or panels and cells of the type used in crystalline silicon photovoltaic modules or panels (the cells have a thickness not exceeding 400 micrometres) (‘solar cells and modules'), currently falling within CN codes ex 8501 31 00, ex 8501 32 00, ex 8501 33 00, ex 8501 34 00, ex 8501 61 20, ex 8501 61 80, ex 8501 62 00, ex 8501 63 00, ex 8501 64 00 and ex 8541 40 90 (TARIC codes 8501310081, 8501310089, 8501320041, 8501320049, 8501330061, 8501330069, 8501340041, 8501340049, 8501612041, 8501612049, 8501618041, 8501618049, 8501620061, 8501620069, 8501630041, 8501630049, 8501640041, 8501640049, 8541409021, 8541409029, 8541409031 and 8541409039) and originating in or consigned from the People's Republic of China, unless they are in transit in the sense of Article V GATT. This CN code is only given for information.

The following product types are excluded from the definition of the solar cells and modules:

- thin film photovoltaic products,

- solar chargers that consist of less than six cells, are portable and supply electricity to devices or charge batteries,

- crystalline silicon photovoltaic products that are permanently integrated into electrical goods, where the function of the electrical goods is other than power generation, and where these electrical goods consume the electricity generated by the integrated crystalline silicon photovoltaic cell(s),

- modules or panels with a output voltage not exceeding 50 V DC and a power output not exceeding 50 W solely for direct use as battery chargers in systems with the same voltage and power characteristics,

- wafers of the type used in crystalline silicon PV modules or panels.

Please limit your reply where requested only to information relating to the solar cells and modules as defined above. Should you have any queries concerning this, please contact one of the officials in charge.

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Product categories

In order to ensure a fair comparison between prices of the imports from the People's Republic of China and prices charged and costs incurred by the Union producers, the Commission intends to classify the product in question into different categories according to a Product Control Number (PCN) (see tables below).

Whenever requested in this questionnaire, a PCN is to be provided in one row (in one cell in an Excel file) without spaces, commas or other separators.

The product control number will be used to compare prices of imports from the countries concerned and prices charged by Union producers. In this respect, it is of great importance that you apply the product control numbers throughout your questionnaire response in an absolutely correct and consistent manner. Please contact the official in charge should you have any questions on the application of product control numbers.

Code tables for the creation of the ‘Product Control Number’ (PCN):

MODULES

Field description Value Explanation

Product type M Modules

Power A Less than 100 Wp¹

B 100 Wp - 149 Wp

C 150 Wp - 194 Wp

D 195 Wp - 204 Wp

E 205 Wp - 214 Wp

F 215 Wp - 224 Wp

G 225 Wp - 234 Wp

H 235 Wp - 244 Wp

I 245 Wp - 254 Wp

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J 255 Wp - 264 Wp

K 265 Wp - 274 Wp

L 275 Wp - 284 Wp

M 285 Wp - 294 Wp

N 295 Wp - 309 Wp

O 310 Wp - 349 Wp

P 350 Wp and more

Number of cells 3 digits For less than 100 cells: start with "0" - e.g. 060 for 60 cells

Size of cellA less than 200 square cm (f.ex 5 inch)

B 200 square cm and more (f.ex 6 inch)

Type of current

D Direct current (DC)

AAlternating current (AC) (f.ex. with an

integrated inverter)

FrameF Frame is present

N No frame present

Device structure - front

G Glass

F Foil of polymer or plastic

O Other

Device structure - back

G Glass

F Foil of polymer or plastic

O Other

Crystal structure M Mono-crystalline

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O Other (including poly-crystalline and quasi-mono crystalline-like)

Junction box

C Conventional junction box

SSmart junction box with integrated

electronics

N No junction box

¹ As defined in "IEC EN 60904"

CELLS

Field description Value Explanation

Product type C Cells

Power

A less than 2,00 Wp¹

B 2,00 Wp - 2,99 Wp

C 3,00 Wp - 3,49 Wp

D 3,50 Wp - 3,74 Wp

E 3,75 Wp - 3,99 Wp

F 4,00 Wp - 4,19 Wp

G 4,20 Wp - 4,39 Wp

H 4,40 Wp - 4,59 Wp

I 4,60 Wp - 4,99 Wp

J 5,00 Wp and above

Size of cell A less than 200 square cm (f.ex 5 inch)

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B 200 square cm and more (f.ex 6 inch)

Thickness

A Less than 170 micrometer

B 170 - 209 micrometer

C 210 micrometer or more

Crystal structure

M Mono-crystalline

OOther (including poly-crystalline and

quasi-mono crystalline-like)

¹ As defined in "IEC EN 60904"

1.1. Examples of the product control number :

MODULE

PCN: MG060BDCFGOMC

Description: Module with power of 230 Wp, 60 number of cells, containing cells of > 200 cm2, direct current, frame is present, front covered in glass, back covered in other, mono-crystalline structure, conventional junction box.

CELL

PCN: CBAAAM

Description: Cell with power of 2.3 Wp, <200 cm2 in size, <170 micro meter in thickness, mono-crystalline structure.


The above means that the landed price of a module from China with PCN MG060BDCFGOMC will be compared with the price and target price (see above) of the EU module(s) that has / have the same PCN. However, if you believe that the technical characteristics taken into account to determine the PCN are not refined enough (i.e., power, number of cells, size of cells, type of current, frame, device structure (front and back), crystal structure and junction box), then, this comparison that takes into account the similarity in PCN may give rise to distortions. Should you believe that other technical characteristics should

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be taken into account for an accurate product comparison, you could mention this provided the current PCN leads to a comparison of a lower-priced Chinese module with that of a higher-priced EU module. The reasoning is the same for cells.

Product comparability

Please comment on the comparability of solar cells and modules imported from the country concerned with that produced in the EU, noting any differences in technical and physical characteristics and end use.

To the extent possible please provide these data also with respect to the solar cells and modules imported from other third countries not covered by the current proceeding.

Response:

…


The objective of the above question on the comparability between (i) the modules / cells from China and the EU modules / cells and (ii) the modules / cells from China and modules / cells from outside the EU or China is to determine whether

- there are technical / functional differences between the modules / cells from the EU and China such that some modules / cells can be purchased from China only and are not accessible from EU producers;

- these modules / cells can nevertheless be purchased outside the EU and China such that the maintenance of the duties / minimum import prices has no real impact on the importers.

SECTION C – PURCHASES

C.1 Summary of purchases

Please state the total of all purchases (volume and value) made by your company of solar cells and modules as requested in Tables C.1.1 and C.1.2 in the excel file. There are separate sheets for modules and cells.

Please state net CIF value at EU frontier (or ex-works value if of EU origin) after deduction of all discounts and rebates. If the invoiced price is prior to CIF EU frontier level, please indicate costs incurred by you for transport and/or ocean freight and insurance to the EU frontier.

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Kindly note that the Commission may request in the course of the investigation a computer file reporting all purchases (transaction-by-transaction) of solar cells and modules intended for consumption in the EU. In this case, a supplementary request for information will be addressed to you with the relevant computer file and guidelines.

Response:

See the response in the excel files C.1.1 and C.1.2. Our company purchases modules and cells on an … basis [and has calculated freight and / or insurance based on …]. Purchases have been shown based on the date at which the purchases were recorded in our accounting system.


Total purchase volume and value should be provided for the calendar years 2011, 2012, 2013 and 2014 and for the Investigation Period from 1 October 2014 to 30 September 2015.

Normally, purchases should be provided based on the date shown in the purchase invoice. However, in order to facilitate your work and to tie as closely as possible to your accounting data, it may be the easiest and most accurate to provide the data based on the date on which the purchase is recognized in your accounts.

For the purchase value of modules or cells purchased from China or from other countries, the questionnaire requests to indicate the CIF value at EU frontier. This value is actually the customs value. Hence, if you purchase on an FOB, C&I, C&F or on another non-CIF EU basis, you could use the documents filed with Customs for customs clearance purposes that should show the CIF EU frontier value. Note that you are also requested to show the costs you incurred for freight and insurance. You could for this purpose add columns to the excel file.

For the modules / cells originating in the EU, you are requested to provide the ex-works value. Hence, if you purchase on a delivered basis or with freight or insurance included, you should subtract from invoice value, the cost of freight and insurance. You may not have this data, in which case you should use the best / easiest method available and provide in the response to the questionnaire the documents that you used for estimating freight and insurance such as quotes from freight forwarders.

The average purchase price that is also requested is the result of the division of the purchase value by the purchase volume.

The European Commission may use the data supplied by the unrelated importer to reconcile with the data that might be supplied by the Chinese and the EU producers. It will also use this to assess whether the duties and minimum import prices have had an effect on the purchases of modules and cells from China and modules and cells originating in the EU. If purchases in the EU increased, this might be used by the EU as a sign that the duties and minimum import prices have had the effect that they were intended to have and may have to be maintained. If not, this may tie in with the arguments in Section H, i.e., that the duties and minimum import prices coupled with the regulatory changes have contributed to demand for solar products decreasing in the EU. That means that it may also be recommended – depending on the trend shown in terms of purchases – to make a statement in this section linking to the arguments in Section H. below. Bear in mind also that the trend in terms of average prices for EU modules and cells may be helpful if it shows that EU producers sold at prices below the minimum

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import prices.

C.2 Import channels

Please explain import channels and the role of subsidiaries or intermediaries, if any.

Response:

…


There is no clarification in the questionnaire for ‘import channels’. Please simply indicate what process you follow to purchase modules / cells from (i) China, (ii) EU producers or (iii) producers outside the EU and China. Do you negotiate directly with the producers? Do you use buying agents? Do you negotiate with selling agents of the Chinese producers? How and with whom do you enter purchase orders? Who issues the purchase invoices? To whom do you settle the purchase price? What is the physical routing of the modules / cells before it arrives at your warehouse?

C.3 Significant purchase transactions

For the five largest purchase transactions concerning modules and the five largest purchase transactions concerning cells bought from the PR China and sold in the European Union during the IP, please fill in Table C.3 in the excel file.

Response:

Excel file C.4 shows the five largest purchase transactions in terms of volume for [modules and cells] purchased from (i) China and (ii) the EU during the Investigation Period from 1 October 2014 to 30 September 2015. The costs reported in Column F are …. The total cost of goods sold reflects the purchase price for the modules and the additional costs in Column F, corresponding to the cost of goods sold as recorded in the company’s accounts.

Comment from SolarPower Europe:Select the five largest purchase transactions from China and the EU producers based on volume and complete Excel file C.3 on this basis. The additional costs cover: ocean freight and insurance up to CIF EU frontier level (see Section C.2 above) and any other costs incurred that is part of your cost of goods sold (e.g., customs clearance charges paid to the customs agent, handling or stevedoring charges, inland freight and insurance). Ultimately, the total cost of goods sold should be indicate and reflect what is shown for the transactions concerned in the cost of goods sold for that transaction in your accounting.

Keep all the documentary evidence including purchase invoice and invoice from service

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suppliers such as the freight forwarder, customs agent on file together with the customs clearance document as it is possible that the European Commission might wish to verify this data at your premises.

SECTION D – SALES AND PRICES

D.1 Summary of sales

State the total quantity and value of all net sales, free of all taxes and after all discounts, made by your company of solar cells and modules to unrelated customers in Tables D.1.1 and D.1.2 of the excel file.

If applicable, state also the sales of finished products using or incorporating solar cells and modules (e.g. if you import cells and assemble them into modules).

Response:

…

Comment from SolarPower Europe:Excel files D.1.1 and D.1.2 solely contemplate the resale of ‘products’, i.e., the sale of modules incorporating cells that were purchased or the resale of purchased modules to which other products were integrated or where products were sold as part of a kit with the modules. It does not as such contemplate the situation where the importer is simultaneously in the project business and, as a result, sells both ‘products’ and services. The supply of services is contemplated in the questionnaire for users.

This being said, we would recommend the following:

(i) if your company is an importer and resells products rather than services, respond as requested in D.1.1 and D.1.2 based on the products you sell;

(ii) if your company is an importer and resells products as well as services, complete D.1.1 and D.1.2 on the basis of the prices you charged for products and services and explain such in the response hereinabove.

The data should be given for the calendar years 2011, 2012, 2013, 2014 and for the Investigation Period from 1 October 2014 to 30 September 2015.

Make sure that the sales volume and value can be linked to your accounts. If turnover is recorded gross of discounts, the discounts should be subtracted as per the request hereinabove. If difficult to calculate on actual basis for each transaction in the calendar year or during the Investigation Period, you could use the ratio of the discount shown in your financial statements

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as a selling expense for the closest financial year.

D.2 Prices of solar cells and modules sold by your company in the EU

Please explain on which basis prices are fixed. If this implies the use of standard documents or price lists, please provide us with a copy of these.

If prices are based on contracts please explain the contract negotiation process and provide full documentation for the most important customers.

Response:

… Evidence is provided in Exhibit D.2.

Comment from SolarPower Europe:This question requires an explanation on how your company determines prices, whether directly on the basis of price lists with or without discounts or on the basis of individual negotiations. Provide an explanation on the factors taken into account during the negotiations. Documentary evidence such as price lists or on the contract negotiation process should be provided including examples of contracts. The European Commission will keep these confidential if you put them only in the confidential version of the questionnaire-response and claim confidentiality for the documentary evidence.

For the duties and minimum import prices to be lifted, it should be shown that if EU producers are selling modules and cells at prices that do not permit to cover their cost of production or at least at prices that do not yield a sufficient profit margin, this is not due to the price levels for Chinese modules or cells. If you believe that price levels remain generally too high in the EU to stimulate demand because of the level of the minimum import prices that require you to sell at prices that are higher than in markets outside the EU where demand for solar products continue to grow or, alternatively, you had to squeeze your profit margins in order to keep prices at a level for some demand can be obtained, such should also be indicated and it should be described how this influences the price setting for your company.

Note that the definitive duty regulation in December 2013 stated the following:

“The investigation indicated that the possible decrease of imports from the PRC will impact in particular those importers that source the product concerned exclusively from the PRC, which is the case only for one out of the four cooperating unrelated importers. Concerning the impact of measures on the unrelated importers' financial situation, it was not excluded that it can be negative, but it has been concluded that this will largely depend on their capacity to switch sources of supply or to pass at least part of the possible price increase on to their customers. For operators importing the product also from other sources than the PRC or importing also other products than the product concerned the negative impact will be further limited. The Commission therefore considers that although there is likely to be a negative impact on the importers of the product

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concerned, this impact will, on average, remain limited.”

Hence, it would be important to also show in the responses to the questions on purchases and sales that it was / is not easy to switch to an other source of supply or to maintain demand a at the prevailing prices levels and impossible to increase prices to your customers.

For the five largest sales of modules and the five largest sales of cells to independent customers during the IP, please fill in Table D.2 in the excel file.

Response:

Please refer to Excel table D.2 which reflects the data for the five largest transactions for modules and sells from China.

Comment from SolarPower Europe:Select the five largest sales transactions based on sales volume and complete Excel file D.2 on this basis.

The questionnaire does not specify whether this should be done solely for Chinese or other modules or cells . We would recommend to select the sales transactions for Chinese modules or cells.

Keep all the documentary evidence including purchase sales invoices, bank receipt of payment, packing list, invoice from freight forwarders and insurance company, etc.

Indicate the nature of and the amount of payments made to any third parties related to sales (e.g. royalties, commissions, distribution or advertising costs, etc.). Mention the way they are taken into account in the sales prices.

Response:

…

Comment from SolarPower Europe:Respond as relevant for your company. Identify where and how these selling expenses are identified in your financial statements and identify whether they are treated as direct or indirect selling expenses. For the amounts, you might also point to the amounts shown in the financial statement that you attach to your questionnaire-response. If accurate, state that it is your company’s general policy to cover all costs in its sales prices so as to warrant a reasonable profitability.

The possible areas of interest of the European Commission for this data might be:

(i) the extent to which these costs impact on the profitability of your company in the sales of modules and cells;

(ii) though perhaps far-fetched, whether the costs that one would reasonably expect an importer to make especially for a branded product were indeed incurred by the importer and

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no exemption from payment of these costs (e.g., royalties if any) was granted by a Chinese supplier in compensation for the respect of the minimum import price.

D.3 Distribution system and sales channels

Explain your company’s distribution network in the European Union and describe the different sales channels up to the first independent customer.

Describe the difference in these sales channels and fill in Table D.3 of the excel file (please note that the information concerns only sales to the first unrelated party). State in what way sales through the different sales channels affect the sales price of your company.

Response:

Please refer to Excel table D.3.

Comment from SolarPower Europe:Respond as relevant for your company. Excel table D.3 identifies wholesalers, retailers, end-users and ‘other’ which could be project managers for example. However, feel free to use your categories of customers but explain on the basis of which of their functions you distinguish them and whether the price-setting is different for the different type of categories of customers and how.

You should show the percentage that each category represents in your sales turnover for modules and cells during the Investigation Period from 1 October 2014 through 30 September 2015.

D.4. Additional costs

Please comment upon the costs your company incurs between importation (Union frontier) of the solar cells and modules and the arrival at your warehouse and estimate the incidence of those costs either as a percentage of the purchase price or as a fixed amount per "unit of measurement" of solar cells and modules. Fill in Table D.4 of the excel file accordingly.

Response:

Please refer to Excel Table D.4. The additional costs cover: [customs clearance costs and other costs incurred beyond the EU border, i.e., handling charges, inland freight, inland insurance …].

Comment from SolarPower Europe:Respond as relevant for your company. As mentioned in Section C.3 above, the additional costs that should be indicated are those beyond the CIF EU frontier value of the goods, i.e., beyond the customs value but are still part of the cost of goods sold as recorded in your accounts. Thus,

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they are a part of the costs shown in Column F to Excel table B.3.

You should show these as a percentage of the purchase price or perhaps more simply as an average per kilowatt for the purchases modules or cells from China from 1 October 2014 through 30 September 2015.

The European Commission is asking this because it may use this data for the comparison of the landed price of Chinese modules and cells with the ex-works price of the EU modules for price undercutting and price underselling calculations as mentioned hereinabove.

SECTION E – EMPLOYMENT

Please fill in Table E in the excel file showing the average number of people employed by your company in the European Union, in total and for solar cells and modules.

Response:

Please refer to Excel Table E which shows total company employment and, separately, employment directly or indirectly involved with modules and cells from China.


Excel table E requests the data to be shown based on FTE / AWU.

The Glossary gives the following definition of AWU: “In light of the Commission Recommendation 2003/361/EC regarding the SME definition, the staff headcount should be expressed in annual work units (AWU). Anyone who worked full-time within an enterprise, or on its behalf, during the entire reference year counts as one unit. Part-time staff, seasonal workers and those who did not work the full year should be treated as fractions of one unit .” As a result, the employment to be shown is that of the full-time employed + those that of the part-time workers, seasonal workers or workers that were employed only for part of the year.

The data should be given for the calendar years 2011, 2012, 2013 and 2014 and for the Investigation Period form 1 October 2014 through 30 September 2015. It should be shown for total company and, separately, for the personnel involved with

(i) purchases of modules and cells from China, i.e., direct personnel

(ii) sales of modules and cells from China, i.e., direct personnel

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(iii) administrative and accounting tasks, i.e., indirect labour.

Some of the employment figures will have to be calculated pro rata if the worker is involved with Chinese and non-Chinese modules or cells or other products. Except for personnel involved with purchasing, the allocation key could be the sales turnover in Chinese modules and cells to total company sales turnover.

For the purpose of demonstrating that the duties / minimum import price should not be maintained, this data is important for the following reasons:

(i) to show that employment by the importers is very important;

(ii) to show the negative effect that the duties / minimum import price have had on employment.

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SECTION G - PROFIT / LOSS SITUATION

This section refers to the profitability of your company and of your sales of solar cells and modules.

Please fill in Table G of the excel file as requested. Then please explain in short how the supporting data that was used to fill in each cell was compiled, namely the absolute amount of profit/loss.

Response:

Please refer to Excel Table G.


The information is requested on a calendar year basis and for the Investigation Period from 1 October 2014 through 30 September 2015. That notwithstanding and unless you can provide the data on a calendar year basis (e.g., when your financial year coincides with the calendar year), for the ease of calculations and ease of demonstrating accuracy, we would recommend to show the data for the calendar year based on the data for the financial year that covers the largest part of the calendar year (e.g., if your financial year is 1 April through March 31 st of the following year, we would suggest showing the data for calendar year 2011 based on the financial year from 1 April 2011 through 31 March 2012). This then allows to base the profit and loss for the total company on the data in the financial statements. That should not be a problem if you can also demonstrate – if the European Commission requested – that sales turnover and costs did not much fluctuate between the calendar year and the financial year.

We suspect that it will be significantly more difficult to impossible to distinguish profitability based on the source of the modules (EU, Chinese and other). This being said, the level of profitability of importers in the business for modules and cells is important. For your background information, we note the following statements that we took from the Regulations by which the European Commission imposed the definitive anti-dumping / anti-subsidy duties in December 2013 and which deal very specifically with the interests of the unrelated importers:

(i) “Overall, during the IP, the activity of the four sampled cooperating unrelated importers related to the product concerned varied between 60 % and 100 % of their total business. In addition, the four cooperating unrelated importers sourced from the PRC between 16 % to 100 % of their total imports of modules, only one sourcing exclusively from the country concerned. The profitability of the four sampled cooperating unrelated importers related to the product concerned was on average 2,3 % in the IP.”

Comment from SolarPower Europe: (cont’d)

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(ii) “The investigation indicated that the possible decrease of imports from the PRC will impact in particular those importers that source the product concerned exclusively from the PRC, which is the case only for one out of the four cooperating unrelated importers. Concerning the impact of measures on the unrelated importers' financial situation, it was not excluded that it can be negative, but it has been concluded that this will largely depend on their capacity to switch sources of supply or to pass at least part of the possible price increase on to their customers. For operators importing the product also from other sources than the PRC or importing also other products than the product concerned the negative impact will be further limited. The Commission therefore considers that although there is likely to be a negative impact on the importers of the product concerned, this impact will, on average, remain limited.”

(iii) “It is acknowledged that the setting of a new relationship between an importer and a supplier may entail additional costs and time investment (e.g. in testing the product). At the same time, changing suppliers seems to be a normal risk calculated in an importers' professional activity and is related to the fact that the PV market is maturing and thus undergoes constant changes (e.g. bankruptcies, consolidations) requiring switching to new suppliers. Moreover, it can be assumed that new types of modules that reach the market on a constant basis (containing e.g. new efficiency characteristics) also require testing. In this respect, testing of a new product (even from the same supplier) appears to be a standard rather than an unusual activity.”

(iv) “Secondly, there is no contradiction between the assumption that the imports from other third countries can increase in response to lower imports from the PRC and that such increase should not be massive in view of the growing demand for PV installations world-wide. At the same time, as the Union industry is expected to retake a certain part of the market share that was previously held by products from the PRC, a certain loss in business for unrelated importers cannot be excluded. However, it is observed that the overall size of the PV market is expected to continue to grow in the long term, as grid parity is reached in more and more locations. Finally, it is clarified that, as in all trade defence investigations, while the situation of the Union industry was assessed in order to establish if it suffered material injury due to the dumped imports, in the context of the Union interest analysis the interest of the Union industry was assessed on an equal basis to the other economic operators, including the unrelated importers. … As a result it was considered that the likely negative impact of the measures on certain importers, in particular those sourcing exclusively from the PRC, did not outweigh the benefits of the measures for the Union industry and the mid-and long term benefits to the Union PV market resulting from fair competition.”

In other words, even if one would hope that the profitability of importers did not decrease, if there was such decrease, it should be emphasized. It should also be emphasized that, contrary to the European Commission’s statement, solar demand did not increase and that this caused difficulties for your company and for a great many of other importers.

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SECTION H - OTHER QUESTIONS

It should be noted that the information submitted under this point can only be taken into account if supported by factual evidence at the time of its submission. Please note that, if you form part of a group of companies you may indicate information referring either to the group or to your specific company, by indicating it in your relevant replies. If you feel you have insufficient knowledge to reply some of the questions, please state 'insufficient knowledge'.


Note the above on a response at group level.

Also bear in mind that when you make arguments in I. and II. below, to the extent available, submit documentary evidence for example from survey companies. These can be provided on a confidential basis within the limits of your contracts with these surveyors. In this regard, bear in mind item 12 of the Instructions below and Annex IV hereto which read as follows:

(i) Item 12 of the Instructions

“Information submitted to the Commission for the purpose of trade defence investigations shall be free from copyrights. Interested parties, before submitting to the Commission information and/or data which is subject to third party copyrights, must request specific permission to the copyright holder explicitly allowing a) the Commission to use the information and data for the purpose of this trade defence proceeding and b) to provide the information and/or data to interested parties to this investigation in a form that allows them to exercise their right of defence. Interested parties are invited to fill in the annexed form (Annex II) [Read: Annex IV] attesting that the information submitted is free from copyrights or that they have obtained the above mentioned permission before submitting it. Interested parties shall contact the Commission for any doubts about the handling of copyrighted information.”

(ii) Annex IV

“Please choose one of the options specified below and fill in the respective form as instructed in point 17 of the Introduction to this Questionnaire.

Option 1 – the questionnaire reply contains no copyrighted information:

"I, Mr/Ms …, declare that none of the information and/or data submitted in this questionnaire reply is subject to third party copyrights"

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Option 2 – the questionnaire reply contains copyrighted information

a) Permission obtained:

" I, Mr/Ms …, declare that I am submitting to the Commission information and/or data in tables/annexes etc. which is subject to third party copyrights for which I have requested and obtained specific permission from the copyright holder/s (name/s of the company/ies) explicitly allowing [please attach document attesting the permission if possible]:

- the Commission to use the information and data for the purpose of this trade defence proceeding and

- to provide the information and/or data to interested parties to this investigation

I also declare that all the other information and data submitted for the purpose of this investigation are free from copyrights."

b) Permission not obtained:

" I, Mr/Ms …, declare that I am submitting to the Commission information and/or data in tables/annexes etc. which is subject to third party copyrights for which I have requested but not obtained specific permission from the copyright holder/s (name/s of the company/ies) to provide the information and/or data to interested parties to this investigation (I provide a meaningful summary of the copyrighted information).


Please make sure that you use one or the other option as is relevant.

I. Please fill in data relative to your market share, customers and suppliers in Table H of the excel file.

Response:

Please refer to Excel Table H.


Please complete to the extent that you have data in this regard or know the demand in the EU or in the EU Member States in which you sell and your sales such that you can

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make a market share calculation. If no data is available, please simply state such.

II. Please answer the following questions:

(1) Please mention and elaborate any causes which may contribute to injury to the Union Industry e.g. volume and prices of imports not sold at subsidised or dumped prices, contraction in demand or changes in patterns of consumption, changes in renewable energy incentives, restrictive trade practices of, and competition between, third country and Union producers, developments in technology and the export performance and the productivity of the Union industry. Please add any other factors which are important in your view.

Response:

SolarPower Europe has submitted a submission to the European Commission on 25 January 2016 in which it identified the following causes of injury to the Union Industry and which we support:

“SolarPower Europe believes that the core problems facing the expansion of module and cell production in the EU to date are primarily two-fold:

(i) Instability in regulatory regimes and support for the deployment of photovoltaic industry in several EU Member States has a substantial impact on demand but also on the attractiveness of PV installations for investors. SolarPower Europe refers to the Position Paper on the Future of the Photovoltaic Manufacturing Industry in Europe that underscores the need for a stable regulatory regime as a prerequisite for the PV industry in the EU:2

2 Position Paper on the Future of the Photovoltaic Manufacturing Industry in Europe, Gaëtan Masson (European Photovoltaic Technology Platform, Milan Nitzschke (SolarWorld AG), Ruggero Schleigher ) Tappeser (European Gigawatt Fab (xGWp), 20 March 2015, http://slord.sk/buxus/docs//PODUJATIA/Future_of_the_Photovoltaic_Manufacturing_Industry_in_Europe.pdf, last accessed on 22 January 2016.

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http://slord.sk/buxus/docs//PODUJATIA/Future_of_the_Photovoltaic_Manufacturing_Industry_in_Europe.pdf

http://slord.sk/buxus/docs//PODUJATIA/Future_of_the_Photovoltaic_Manufacturing_Industry_in_Europe.pdf


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(ii) The scale of production required to achieve the necessary economies of scale to allow solar energy to be competitive with other traditional sources of energy and yield the returns on investments needed for investors in large-scale installations, with smaller production catering for high added value and specific niche products. According to a JRC report of 20153:

“For a large-scale manufacturing initiative (modules) to be economically viable and to have impact on the global market it would need to aim for a capacity of several GW. This reflects the importance of economies of scale… It would need to meet a short-term module cost price target of below EUR 0.40/W and have a credible plan for further reduction. This reflects the reality that product differentiation is based primarily on price, and is expected to continue to be so in the medium term.’

JRC have identified that it is economies of scale that drive cost reduction in modules today and that a realistic price for modules is 0,4 EUR/w considerably below the MIP level.

PV manufacturing is transforming into a mass-producing industry with its sights on multi-GW production sites. This development is linked to increasing industry consolidation, which presents a risk and an opportunity at the same time.’ This demonstrates that JRC are aware that module manufacturing is becoming concentrated in a few companies hands, this is certainly the case in Europe. JRC note the need for multi-GW sites of which we have none in the EU today.

The JRC notes that moving to a 2 GW size factory leads to approximately an 8% reduction in module cost. These economies of scale are experienced in Asia, not just China, but not found in the EU.

None of the EU producers has a capacity of several GW as is demonstrated by the responses to the standing questionnaires that are available in the non-confidential file. The large majority has a capacity that is significantly smaller. The data from the report published by the European Commission4 when compared with the production capacity of the EU producers as provided in the responses to the standing file is striking:5

3 Perspectives on Large Scale Manufacturing of PV in Europe, JRC, 2015.

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The smallest of the 15 largest module suppliers shipped no less than 800 to 900 MW in 2013 whilst seven of them shipped more than 1,500 MW. Compare this with the data provided by the EU module producers in their responses to the standing file:

- Company AE: 950 – 1,150 MW

- SolarWorld: 650 MW

- Company S 320 MW

- Sillia: 260 MW

- Company B: 200 MW

- SolarWorld Thüringen 200 MW

- Company DA 150 MW

- Company W 100 – 150 MW

- Company O 50 to 100 MW

- Energetic Energietechnik GmbH 70 MW 5 See : Top Solar Module Manufacturers of 2013, May 14th, 2014 by James Ayre,

http://solarlove.org/top-solar-module-manufacturers-2013/, accessed on 25 January 2016.

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http://solarlove.org/top-solar-module-manufacturers-2013/

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- Company X 60 MW

- MG AB “Precizika” 60 MW

- Solvis d.o.o. 60 MW

- Waris: 40 MW

- Cappello: 30 – 50 MW

- Company H 40 MW

- Global Sun SA 30 MW

- Company I 10 MW

As mentioned above, the JRC report itself states that PV producers must choose to either develop and produce high added value or tailor-made solutions or, alternatively, move into large-scale production with a capacity of several Gigawatt in order to be economically viable with cost rationalizations sustaining module prices of EUR 0.40/W and below. The latter option is not sustainable for the vast majority of the EU producers which would have to choose the first option as is confirmed in the Position Paper on the Future of the Photovoltaic Manufacturing Industry in Europe cited above. That being the case, these producers should benefit from accompanying measures to do just that, i.e., develop high added value and tailor-made solutions rather than offering a commodity product.

However, this is a different market and anti-dumping and countervailing measures are not the instrument to achieve this goal, especially not if it means that other sectors of the photovoltaic industry catering to the large-scale deployment of PV installations are hindered in their expansion. The table submitted in the request for the expiry review by EU ProSun itself demonstrates not only that imports from China have collapsed but, in addition, that in absolute figures the decrease in the consumption of modules (- 10,554 MW) outstrips the decrease in imports from China (- 7,782 MW). The decrease in consumption has to be sought in the changes in regulatory support for the photovoltaic industry and the uncertainty of investors, which in combination stifled demand.

In those EU Member States, such as the UK, where the regulatory support through feed-in tariffs or otherwise was kept in the most recent period, demand for photovoltaic installations thrived and solar installations boomed. With the change in the regulations in the UK starting in 2016, it is feared that the boom in demand will be called to a halt. This sufficiently demonstrates that the regulatory changes are unrelated and not caused by imports from China. The UK experience demonstrates conclusively that demand for solar installations is a matter of price: either public support is provided such that these installations are profitable or, if not, the prices for the solar installations including the modules must be at a level to allow sufficient profitability.

In fact, the changes in support schemes relate to the fact that support for renewable energy in the form especially of feed-in tariffs is inherently limited in time. As the industry stimulated by feed-in tariffs takes off, the feed-in tariffs must decrease and ultimately disappear lest they cause too great a strain on the national budgets. There are then only two remedies to maintain demand: change the form the public support, or implement cost rationalizations to decrease the price of the PV installations in order to make certain that PV installations remain competitive with sources of conventional energy and to sustain demand. This puts pressure on all participants along the PV EMECURRENT 936404759.1 16-févr.-16 18:04 29


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value chain to decrease costs and in the first place on the manufacturers of wafers, cells and modules, as also on the manufacturers of inverters and other balance-of-system (BOS) manufacturers. The maintenance of minimum import prices at artificial levels that are not in sync with world market prices, unfortunately, has adverse effects by impacting demand negatively.

With regard to cells, it must be noted that the number of cell manufacturers in the EU is extremely limited. There is one sole significant producer which uses all, or a very large part, of its cell production captively. Accordingly, module producers in the EU - especially if they want stability of supplies through access to several cell producers - have no choice but to purchase cells also outside the EU. But, it must be highlighted, this is not a cause of continued injury. It is simply a fact: non-captive EU cell production is insufficient to meet demand for cells in the EU. Imports are needed and are a factor of economic solution rather than a factor of injury. The requests for expiry review indicate that imports of cells from China increased particularly from 2013 to 2014 well after duties were imposed and cells from China made subject to minimum import prices. The increase of imports from China therefore are a clear indicator of the need of EU producers to fill demand including from sources that are subject to the anti-dumping / countervailing measures. This being said, as mentioned above, production capacity for modules in the EU is also largely insufficient to meet EU demand for modules.

(2) What is the degree of concentration in your sector (number of companies operating)?

Response:

…


Please complete as relevant. The objective of the question is to determine whether the number of importers is so important that it is difficult to transfer price increases to the customers because of the high degree of competition. Hence, if accurate, the response should be that it is difficult in light of the competitiveness of the market for importers to transfer price increases or to compete with importers of modules or cells from sources that are not subject to the minimum import prices. Also, the question is whether it is the maintenance of the minimum import price as an artificial price threshold that is causing injury to the importers or inter-importer price competition.

(3) Who are your four main competitors on the EU market and what are their price levels?

Response:

…


Please complete as relevant and to the extent that you have information available. The

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objective of the question is again to determine whether the number of importers and their market strength is so important that it is difficult to transfer price increases to the customers because of the high degree of competition. Also, the question is whether it is the maintenance of the minimum import price as an artificial price threshold that is causing injury to the importers or inter-importer price competition.

(4) Which are the elements that determine competition in your sector (i.e. prices, delivery times, service, etc)? Please substantiate.

Response:

…


Supply in accordance with delivery times and quality services will be important but we imagine that in the case of an importer that is not a project manager or installer, nothing will surpass the importance of price and that there is no possibility to transfer price increases. Hence, in your own words, you should indicate why contrary to the European Commission’s statement in the definitive duty regulation (see quotations under Section G above) that the negative impact on the importers of duties / minimum import prices would be limited is incorrect with prices driving the market and increases or even stable prices entailing stark decreases of demand.

(5) What has been the evolution since 2011 of trade volumes from third countries of solar cells and modules

Response:

Specific statistical import data for the solar modules and cells is not available to the respondent. However, based on Commission Implementing Regulation (EU) 2016/185 of 11 February 2016 extending the definitive anti-dumping duty imposed by Council Regulation (EU) No 1238/2013 on imports of crystalline silicon photovoltaic modules and key components (i.e. cells) originating in or consigned from the People's Republic of China to imports of crystalline silicon photovoltaic modules and key components (i.e. cells) consigned from Malaysia and Taiwan, whether declared as originating in Malaysia and in Taiwan or not6, the total volume of imports into the EU and the share of third countries was the following :

In MW 2012 2013 2014 Reporting Period

1/04/2014 – 31/03/2015

Total imports into the EU 15,740 10,300 8,067 8,325

Imports from the PRC 11,119 5,584 3,443 3,801

6 Official Journal No L 37, 12 February 2016, p. 76.EMECURRENT 936404759.1 16-févr.-16 18:04 31


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Imports from Malaysia

Total 464 495 1,516 1,610

Modules 108

1% market share

1,036

17% market share

Cell 358

10% market share

573

27% market share

Imports from Taiwan 1,375 1,557 1,752 1,793

Imports from other countries 2,782 2,664 1,311 1,121

EU consumption modules based on Malaysian data

10,800 6,094

EU consumption cells based on Malaysian data

3,580 2,122

Market share of other countries in total EU consumption

17.7% 13.5%

Our company has no other means to verify the imports of modules and cells from different countries.

(6) Has some external factor other than anti-dumping and anti-subsidy duties in force (trade arrangements, currency fluctuation, supply and demand, etc.) influenced the evolution of prices in your market since 2011? Please explain and substantiate.

Response:

The very significant decrease in demand which is apparent also from the table shown above based on the European Commission’s data in the anti-circumvention investigation has been caused by a combination of the withdrawal of subsidies such as feed-in tariffs for solar installations and the maintenance of prices at an artificially high level as a result of the minimum import prices and duties. Importers such as our company have had to charge prices at an absolute minimum level by squeezing profit margins in order to try and sustain demand and sales to some extent. Only a few markets such as the UK felt this impact a little due to the temporary continuation of subsidies as a result of which the UK was almost the sole EU market in which demand for solar installations continued to increase up to 2015. With regulatory changes in the subsidization of solar installations, this will be called to a halt.

Comment from SolarPower Europe:Please make sure that the above statement can be supported by the data on prices that you provide under Section D and the data on profitability under Section G.

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We also note that in its submission filed with the European Commission of 25 January 2016, SolarPower Europe made the following statement which we support:

“Through the MIP, prices for modules have been kept at an artificially high level in the EU at around € 0.56 / Wp for modules and € 0.28 / Wp for cells instead of following their normal development in line with increased cost rationalization. Industry experts7 predict that price decreases could be significant if demand is sustained, i.e.:

- Evolution of photovoltaic installations

- Corresponding evolution of prices reflecting the effect of the learning curve following increased production

7 See PV LCOE in Europe 2015 – 2050, Eero Varitainen, Gaëtan Masson, Christian Breyer, 31st European Photovoltaic Solar Energy Conference, September 14 – 18, 2015, Hamburg, at http://www.researchgate.net/publication/281939918_PV_LCOE_in_Europe_2015-2050, last accessed on 27 October 2015.

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Continued cost rationalization is confirmed by other commentators as well. Reference is made to the following:

“Our analysis of different scenarios concludes that an end to cost reduction for power from solar photovoltaics is not in sight. Even in the most conservative scenarios for market development, without considering technology breakthroughs, significant further cost reductions are expected.

The following methodology was used to reach this conclusion:

The starting point of the analysis was to derive consistent scenarios for the global photovoltaics market development between 2015 and 2050. These scenarios were discussed and revised in expert workshops and represent a range from “very pessimistic” to “very optimistic” in terms of global photovoltaics market developments. In the most pessimistic scenario, annual additional photovoltaic installations would increase from ~40 GW in 2014 to 175 GW in 2050 (cumulated produced capacity until 2050 of ~6000 GW). In the most optimistic scenario (“breakthrough scenario”), 1780 GW of photovoltaic systems will be installed per year by 2050 (cumulated produced capacity by 2050: ~36000 GW).

Based on these market scenarios, future prices for photovoltaic modules were estimated using the “photovoltaic learning curve,” which builds on the historic experience that with each duplication in the total number of modules produced, the price per module fell by roughly 20 percent. Based on expert discussions at the workshop, we varied the future learning rate between 19 and 23 percent and introduced the conservative assumption that prices will fall with a learning rate of only roughly 10 percent in the next years, until a total

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(cumulated) capacity of 5000 GW is produced. This approach results in module costs decreasing from approximately 550 EUR/kW today to 140-210 EUR/kWp by 2050 in the breakthrough scenario, and to 270-360 EUR/kWp in the most pessimistic scenario. A similar approach was applied to estimate the future cost of solar inverters, resulting in investment costs falling from 110 EUR/kWp today to between 23 and 39 EUR/kWp by 2050.”8

As mentioned above, the market for modules and hardware components of a PV installation is already or is en passe of becoming a commodity market. That is confirmed in the following statement :9

“The cost of hardware sourced from global markets will decrease irrespective of local conditions. Solar photovoltaic modules and inverters are traded already today on global markets, similar to commodity products, and costs for other components are similarly global. While regional differences may exist due to the very young nature of utility-scale solar photovoltaic markets in different parts of the world, it is very unlikely that large differences in investment costs between different regions of the world will persist in the future.”

The EU cannot be secluded from these developments.

The JRC report mentioned above, states that ‘Bloomberg New Energy Finance claims that top tier Chinese manufacturers already have module production costs as low as USD 0.48/W (2013). Further, they assume a further cost reduction to USD 0.33/W by 2020. The main cost savings should come from cheaper polysilicon, thinner wafers with smaller kerf losses and increased efficiency.’ Maintaining prices above their natural level does not benefit the production of modules and cells and the solar sector in the EU.

Some have disputed that the MIP keeps prices in the EU at a level beyond that prevailing in other countries. In countries where prices for modules are high, or potentially higher than in the EU, there are also strong incentives for photovoltaic installations, i.e.:

- in the USA where the federal energy investment tax credit amounts to 30%, state-level incentives such as net metering, grants, feed-in-tariffs are granted and renewable portfolio standards encourage photovoltaic investments;

- in Japan where high feed-in-tariffs apply.

In these countries (as in the EU in the period until 2011 when high feed-in-tariffs and other incentives existed), even with high prices for the modules, investment in photovoltaic installations continues to grow as the support schemes make the investment attractive.

8 Current and Future Cost of Photovoltaics, Long-term Scenarios for Market Development, System Prices and LCOE of Utility-Scale PV Systems, Study commissioned by Agora Energiewende, Fraunhofer ISE, February 2015, p.7, http://www.agora-energiewende.de/fileadmin/Projekte/2014/Kosten-Photovoltaik-2050/AgoraEnergiewende_Current_and_Future_Cost_of_PV_Feb2015_web.pdf, last accessed on 21 January 2016.

9 Id., p. 9.EMECURRENT 936404759.1 16-févr.-16 18:04 35

http://www.agora-energiewende.de/fileadmin/Projekte/2014/Kosten-Photovoltaik-2050/AgoraEnergiewende_Current_and_Future_Cost_of_PV_Feb2015_web.pdf

http://www.agora-energiewende.de/fileadmin/Projekte/2014/Kosten-Photovoltaik-2050/AgoraEnergiewende_Current_and_Future_Cost_of_PV_Feb2015_web.pdf


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However, when compared to prices in countries such as India or Turkey, the prices in the EU remain higher. This is important when there are limited incentive schemes and tendering is introduced as per the requirements of the European Commission under the State Aid Guidelines, which makes price a premium consideration.

Suppliers of other components or services for PV installations (e.g., inverters or installers) have decreased the prices for their products / services by 62% as a result of cost rationalizations but also of an effort to render the global price for a PV installation as attractive as possible and to stimulate demand as is shown in the table below:

The expiry of the measures for modules and cells and the establishment of the prices of modules and cells on the basis of cost rationalisations would contribute to stimulating installations in Europe and therefore benefit the solar sector at large.

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(7) What is the possibility for your company to switch to other sources of supply for solar cells and modules?

Response:

The possibility to switch to other sources of supply is reduced. First, the imposition of anti-circumvention measures on exports from Malaysia and Taiwan reduces this possibility. Some producers are exempted from these duties but they have established customers and are in any event unable to supply in accordance with EU demand also in light of booming demand in South-East Asia and other regions of the world. Second, as the table drawn above based on the Commission Regulation imposing anti-circumvention investigations demonstrate the imports into the EU of modules and cells from other third countries has decreased as well as their market share thereby emphasizing that other sources of supply do not offer a solid possibility for importers to switch to.

(8) Do the producers/exporters of the country concerned have any comparative advantages in comparison with the Union producers? Please substantiate your comments by giving some examples.

Response:

As confirmed by the EU producers themselves in the attachment to the JRC report, solar products have become mass commodity products where economies of scale at the level of 2Gigawatts production is required for prices to be at a level to sustained demand. The JRC report itself states that “[t]hese economies of scale are experienced in Asia, not just China, but not found in the EU”. The response in Section II-(i) above shows that none of the EU producers save perhaps one meets even the 1 Gigawatt level and the vast majority of the EU producers produce well below the 500 MW level with many even producing far below 100 MW. It is therefore impossible for the EU producers to achieve the economies of scale that are needed to obtain price levels that can stimulate demand.

(9) What was the impact on your company of imposition of measures? What has changed since measures were imposed (adjustment of business model, consolidation, finding new sources and new markets, etc)? Did measures affect your investment capacity?

Response:

…


The response to this question will have to be drafted based on your own experience and with reference to the response you gave in Sections C, D and G. If possible, however, you should stress:

(i) many importers having had to stop trading solar products;

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(ii) importers having had to start trading in markets outside the EU;

(iii) the difficulties of finding new sources of supply;

(iv) the impact on profitability due to an artificially high level of prices and the ensuing decrease of demand.

III. Future perspectives:

(1) What will happen to your business and the market in general if measures continue to be imposed on imports of solar cells and modules from the People's Republic of China? Please explain the reasons for your view.

Response:

For all the reasons mentioned above, with prices being at an artificially inflated level, demand will not be stimulated and with the further dismantling of subsidy schemes such as in the UK, demand will continue to deteriorate rather than increase. Our company will lose sales volume, profitability and, as a result employment. This will equally affect the EU producers.

Comment from SolarPower Europe:You may wish to add further supporting language and data from the point of view your own business and the data you have submitted in response to this questionnaire.

(2) What will happen to your business and the market in general if measures will not continue to be imposed on imports of solar cells and modules from the People's Republic of China? Please explain the reasons for your view.

Response:

In its submission filed with the European Commission on 25 January 2016, SolarPower Europe argued the following with which we agree:

A. If the measures are removed this will contribute to demand being increased and significant new employment will be created with commensurate value added

Employment in the EU that hinges on the deployment of PV installations extends well beyond the production of modules and cells. In fact, employment at the level of the module and cell producers is only a fraction of employment in the EU’s photovoltaic industry. Much more significant employment is connected to the upstream industry (production of materials and equipment) and particularly to the downstream industry (including engineering, installations and maintenance).

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The requests for the expiry review allege that employment at the level of module and cell production developed as follows:

2012 2013 2014 RP

Modules 11,100 8,418 6,094 6,094

Cells 3,046 2,058 1,705 1,705

Total 14,136 10,476 7,799 7,799

- 44.8%

But, the situation is significantly worse if the entire EU PV value chain is taken into account as is shown in the table below taken from the study prepared by E&Y.

The Ernst & Young report confirms, as mentioned hereinabove, that the decline in PV installations is to be attributed to regulatory changes:

“This decline is largely caused by regulatory changes in several countries (e.g. Belgium, Spain and Germany) where public policy has evolved to limit prosumers as a consequence of, for instance, grid fees and the reduction/termination of incentive schemes. In Spain for example, which had the second highest cumulated capacity in 2008, retroactive changes, solar taxes and fines for non-declared prosumers have considerably reduced solar installation. In 2014, Spain fell to the fourth place and it is estimated that it will only have the fifth largest cumulated capacity by 2020. Germany, Europe’s largest PV industry, saw its annual installed capacity decrease due to reduced incentives, while module prices set at the MIP level could not follow this trend. This created market uncertainty.”10

The report notes the significant cost reductions that were made which impacted global market prices for modules and concludes that the EU could not make use of those to stimulate demand for PV installations as a result of the anti-dumping / countervailing measures:

“The full benefits of these cost reductions have not been realised in Europe, as imports of modules and cells have been limited since the end of 2013 due to the EU’s trade defence measures, such as the MIP, without a noticeable increase in European production. Reduced prices have thus not been linked to increases in demand, which would normally be expected.”11

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The E&Y report also emphasizes that employment especially among downstream operators is much larger than amongst upstream operators and has gradually shifted more towards the downstream sector of the European photovoltaic industry:12

Against the above background, the Ernst & Young report then estimated the effect of the expiry of the anti-dumping / countervailing measures noting the following:

Based on the increase in demand, Ernst & Young then estimated the effect on employment in Germany and Italy and extrapolated the results thereof for the entire EU. That resulted in very signification job creation as shown below:13

11 Id.

12 See Ernst & Young report, at p. 26.

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In other words, Ernst & Young estimates that 22,674 new jobs would be created in Germany and Italy alone and 54,615 jobs in the EU overall with a commensurate increase in value added and budgetary revenues for the governments concerned.

It must be emphasized that the upstream sector including the EU module manufacturers benefit from the creation of new jobs.

B. Demand for PV installations must be stimulated in order to contribute to the EU’s goals for the use of renewable energy by 2030 and the commitments it took in the Paris COP21 agreement

The EU has set a target for use of renewable energy of 27% by 2030.14 SolarPower Europe considers that solar energy can contribute 10% to 15% of the electricity demand in 2030 as shown below:15

14 Communication from the Commission to the European Parliament, the Council, the European Economic and Social Committee and the Committee of the Regions, A policy framework for climate and energy in the period from 2020 to 203, Brussels, Brussels, 22.1.2014, COM(2014) 15 final.

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However, this means that the demand for PV installations must be stimulated and that will require as mentioned above, allowing hardware to be sold at prices that reflect cost rationalizations as reflected in global market prices without secluding the EU from the rest of the global PV market.

This has become all the more important with the Agreement reached in Paris during the COP 21. With the commitments taken by all parties to the Agreement, including the EU, SolarPower Europe believes that it is all the more important for the EU to act consistently with its commitments and take all actions to stimulate solar installations which is a very significant source of renewable energy that directly contributes to combating global-warming.16

16 Paris Agreement, Framework Convention on Climate Change, FCCC/CP/2015/L9, 12 December 2015, http://unfccc.int/resource/docs/2015/cop21/eng/l09.pdf.

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C. EU production capacity cannot meet demand

The requests for expiry review show the following demand and production capacity figures:17

In MW Demand Production capacity Shortfall

Modules 7,172 1,543 5,629

Cells 3,450 1,00018 2,450

Thus, even taking total current production capacity into account, the EU producers are unable to meet even a depleted demand, let alone meeting demand assuming that they would be able to operate at full capacity.

It is in the overall interest of the public policy objectives of the EU towards meeting the targets for use of renewable energy and combating climate change, as well as the EU’s photovoltaic industry at large that the measures expire in order for the EU to benefit from cost rationalizations, stimulated demand, job and value added creation.

(3) What will happen to your business and the market in general if measures will continue to be imposed only on imports of modules but not on imports of cells from the People's Republic of China? Please explain the reasons for your view.

Response:

Anti-dumping measures should be removed on both cells and modules. Removing anti-dumping measures on cells would be a step in the right direction. A significant number of cell producers have closed production. The sole large cell producer remaining, SolarWorld uses cell production captively for the production of modules in the EU or in the USA. Thus, module producers in the EU depend on the availability of alternative supply sources especially from China and Taiwan.

This would not, however, resolve the problems faced by our company and most if not all other importers and the downstream operators. Indeed, demand for solar installations must be stimulated. That is not achieved by excluding cells from anti-dumping and countervailing measures. It requires the withdrawal of the anti-dumping and countervailing measure altogether so that prices can develop to their natural level reflecting economies of scale.

(4) Please indicate whether your company would be in favour or against the continued imposition of anti-dumping and anti-subsidy measures in the current form.

Response:

17 See Tables 1and 4 of the request for the expiry review of the anti-dumping measures.

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Our company is opposed to the imposition of anti-dumping and anti-subsidy measures for solar modules and cells in any form.


As mentioned above, please do not forget to complete and sign Annex IV hereto.

As well, please do not forget to complete and sign the certification page below.

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CERTIFICATION

The undersigned certifies that all information herein supplied in response to the questionnaire is complete and correct to the best of his knowledge and belief and understands that the information submitted may be subject to audit and verification by the European Commission.

Internal registration number (see page 1):

Company name:

LIMITED VERSION (*) VERSION OPEN FOR CONSULTATION

_____________________ _______________________Date Signature of authorised official

_____________________ _______________________Company stamp

_______________________Name and title of authorised official

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ANNEX I - INSTRUCTIONS

1. Answer questions in the order presented in the questionnaire. Listed information and tables should conform to the requested formats and should be clearly labelled. You only need to fill in what is applicable to your company. If you encounter difficulties with this you should contact the officials in charge to find an acceptable solution.

2. The confidentiality of information will be fully respected in the proceeding. Therefore, information and supporting evidence may be given on a confidential basis (e.g. business secrets, such as list of customers, etc.) and will not be made available to any other interested party or any administration, except DG Trade, Directorate H of the European Commission. If you provide such confidential information, it must – in accordance with the Commission’s internal rules on markings – be labelled as “limited”. Moreover, pursuant to Articles 19 and 21 of Council Regulation (EC) No 1225/2009, any party providing such “limited” information is required to furnish a non-confidential summary thereof which is open for inspection to other parties. Such summaries shall be in sufficient detail to permit a reasonable understanding of the substance of the information submitted as “limited”. In exceptional circumstances, such party may indicate that such information is not susceptible to such summary. Where a meaningful summary is not provided, and where the information is susceptible to such summary, the information submitted as “limited” may be disregarded. All documents which are submitted to the Commission services which are not labelled “limited” are open for inspection to all interested parties in order to ensure the necessary transparency of the investigation.

3. You should to send your reply with all the electronic files to the functional mailbox: [email protected] or, if files are too voluminous, provide an electronic version of the questionnaire including its annexes and all data on a CD-R/DVD to be delivered by post or by hand. The "Certification" should also be provided electronically.

4. Identify clearly all units of measurement and currencies used in tables, lists and calculations.

5. Member States of the European Union are listed in the glossary. Answers to questions referring to the "Total Union" or "European Union" should include them all.

6. Do not leave any question or section blank. If a question does not apply to your company, please explain clearly why this is the case. If the answer to the question is

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"zero", "no", “none” or "not applicable", then write "zero", "no", “none” or "not applicable".

7. Unless otherwise specified, replies should relate to the investigation period ('IP') as defined on page 1 of this questionnaire.

8. The European Commission may carry out on-the-spot visits to examine the records of your company and to verify the information provided in this questionnaire. All worksheets and documents used in answering this questionnaire, in particular those linking the information supplied with accounting and management records, should be retained for on the spot verification purposes by the European Commission.

9. If you intend to have another party acting on your behalf, e.g. a law, accountancy or consultancy firm, please ensure that the Commission receives a scanned copy of the original power of attorney and fill in the legal representative table.

10. If the requested information is not received by the Commission within the time limit specified, preliminary or final decisions may be made on the basis of facts available in accordance with Article 18 of Council Regulation (EC) No 1225/2009 and Article 28 of Regulation (EC) No 597/2009.

11. If you have any problems completing the questionnaire, please contact the Commission officials in charge of the proceeding (see cover page) forthwith – they will assist you. General information about trade defence processes (general overview, steps, etc.) is available on the website: http://ec.europa.eu/trade/tackling-unfair-trade/trade-defence/

12. Information submitted to the Commission for the purpose of trade defence investigations shall be free from copyrights. Interested parties, before submitting to the Commission information and/or data which is subject to third party copyrights, must request specific permission to the copyright holder explicitly allowing a) the Commission to use the information and data for the purpose of this trade defence proceeding and b) to provide the information and/or data to interested parties to this investigation in a form that allows them to exercise their right of defence. Interested parties are invited to fill in the annexed form (Annex II) attesting that the information submitted is free from copyrights or that they have obtained the above mentioned permission before submitting it. Interested parties shall contact the Commission for any doubts about the handling of copyrighted information.

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ANNEX II - GLOSSARY

Explanations and definitions of some of the more specialised terms used in the questionnaire are provided here.

Annual working unit/AWU

In light of the Commission Recommendation 2003/361/EC regarding the SME definition, the staff headcount should be expressed in annual work units (AWU). Anyone who worked full-time within an enterprise, or on its behalf, during the entire reference year counts as one unit. Part-time staff, seasonal workers and those who did not work the full year should be treated as fractions of one unit.

Country of origin

The country of origin is normally either the country where the good has been wholly obtained or, when more than one country is concerned in the production of the good, the country where the last substantial transformation has been carried out.

European Commission

The European Commission is the executive body of the European Union. In anti-dumping proceedings it has the responsibility for the receipt of complaints and for conducting anti-dumping investigations. The European Commission is also the only decision-making body which means that it decides among others whether to impose provisional or definitive duties, to terminate proceedings and to accept undertakings.

Exporting country

The exporting country is normally the country of origin. However, it may be an intermediate country, except where, for example, the products are merely transhipped through that country, or the products concerned are not produced in that country, or there is no comparable price for them in that country.

Export price

The export price is the price actually paid or payable for the product concerned when sold for export to the European Union, or to other countries.

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Independent customers

A customer is being considered independent if he cannot be defined as a related company; see under related company.

Investigation period (IP)

For the purpose of representative findings, an investigation period has to be selected which, in the case of dumping, normally covers a period of not less than six months immediately prior to the initiation of the proceeding. The investigation period is indicated in the questionnaire.

Member states

Country Code CurrencyAustria AT EURBelgium BE EURBulgaria BG BGNCroatia HR HRKCyprus CY EURCzech Republic CZ CZKDenmark DK DKKEstonia EE EURFinland FI EURFrance FR EURGermany DE EURGreece GR EURHungary HU HUFIreland IE EURItaly IT EURLatvia LV LVL – EUR after 1/1/2014Lithuania LT LTL – EUR after 1/1/2015Luxembourg LU EURMalta MT EURNetherlands NL EURPoland PL PLNPortugal PT EURRomania RO RONSlovakia SK EURSlovenia SL EURSpain ES EURSweden SE SEK

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United Kingdom UK GBP

Related party (company)

For the purpose of completing this questionnaire, natural persons or legal persons (i.e. companies) should be deemed to be related if:

(a) they are officers or directors of one another's businesses;

(b) they are legally recognised partners in business;

(c) they are employer and employee;

(d) any persons directly or indirectly owns, controls or holds 5% or more of the outstanding voting stock or shares of both of them;

(e) one of them directly or indirectly controls the other;

(f) both of them are directly or indirectly controlled by a third person;

(g) together they directly or indirectly control a third person; or

(h) they are members of the same family.

ANNEX III - VERSION OPEN FOR CONSULTATION

When completing the questionnaire version open for consultation by interested parties you should bear in mind that all exporters, importers and other Union producers will have access to it. The reply open for consultation should be sufficiently detailed to permit a reasonable understanding of the substance of the information submitted in confidence.

In order to assist you in completing the questionnaire version open for consultation by interested parties, we advise you to proceed as follows:

1. Use the completed “limited” questionnaire response as a basis. Identify all information in the limited response which you consider is not limited and copy it to the version open for consultation.

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2. After this, check once more whether the information you did not copy to the file for consultation is really limited. If you still consider it to be confidential, you must give the reasons why, item by item and summarise the limited information in a form which is suitable for consultation by interested parties. If, in exceptional circumstances, it is not possible to even summarise the limited information, give reasons why summarisation is not possible.

3. Please refer to the general rules on confidential vs non confidential information.

Examples on how to summarise "limited" information¨ When the information concerns numbers for various years you can use indices.

Example of limited information:2006 2007 2008

20.000 EUR 30.000 EUR 40.000 EUR

The summary open for consultation by interested parties could be as follows:2006 2007 2008100 150 200

¨ When the information concerns a single number you can apply a % change to it.

Example of limited figure:"My cost of production is EUR 300 per tonne."

The summary for consultation could be as follows:"My cost of production is EUR 330 per tonne" (+ footnote saying: "actual numbers have been amended by a margin of maximum + 10% to protect confidentiality").

¨ When the limited information concerns text you can either summarise it or eliminate the names of parties by indicating their function.

Example: TRADING COMPANY Ltd told me that the prices of imports were 20% lower.

Summary for consultation by interested parties: [one of my customers] told me that the prices of imports were 20% lower.

ANNEX IV – DECLARATION ON COPYRIGHT

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Please choose one of the options specified below and fill in the respective form as instructed in point 17 of the Introduction to this Questionnaire.

Option 1 – the questionnaire reply contains no copyrighted information:

"I, Mr/Ms …, declare that none of the information and/or data submitted in this questionnaire reply is subject to third party copyrights"

Option 2 – the questionnaire reply contains copyrighted information

a) Permission obtained:

" I, Mr/Ms …, declare that I am submitting to the Commission information and/or data in tables/annexes etc. which is subject to third party copyrights for which I have requested and obtained specific permission from the copyright holder/s (name/s of the company/ies) explicitly allowing [please attach document attesting the permission if possible]:

- the Commission to use the information and data for the purpose of this trade defence proceeding and

- to provide the information and/or data to interested parties to this investigation


b) Permission not obtained:

" I, Mr/Ms …, declare that I am submitting to the Commission information and/or data in tables/annexes etc. which is subject to third party copyrights for which I have requested but not obtained specific permission from the copyright holder/s (name/s of the company/ies) to provide the information and/or data to interested parties to this investigation (I provide a meaningful summary of the copyrighted information).


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