Amidst trade disputes with the US and EU, Chinese solar manufacturers have begun moving production offshore over the past two years.

For instance, the solar manufacturer CSUN has set up factories in Turkey while ReneSola, also a Chinese solar firm, is using OEM models in Japan, Korea, India and Poland to sidestep trade barriers and unfavorable taxation rates.

With a new round of anti-dumping and countervailing duties expected, JinkoSolar will build its 100-120MW modules in South Africa. Yingli Solar and Suntech Power may also increase production capacity overseas.

Taiwan producers are also ensnared in the latest round of anti-dumping investigations in the United States. While the duty rates may ultimately change, combined pressure from declining sales and rising prices will compel Taiwan vendors to gin up overseas manufacturing.

Currently, Tainergy Tech has established cell and module production lines in Vietnam. Solartech Energy has built a solar cell production line in Malaysia. Other vendors plan for upstream manufacturers to build module production lines in Thailand.

Cell manufacturers also have plans to develop solar cell or module capacity in the Americas in the 100 - 200MW range.

While overseas production may help Chinese and Taiwanese vendors negate the effects of trade disputes and taxation, those firms are also considering weaker economic conditions and an increase in local labor costs as they continue to move production offshore.

Jason Huang, a research manager at EnergyTrend, said that, producers are weighing the needs of the local market as well as their organizations’ global strategy.

“But costs remain paramount for most solar manufacturers. Emerging markets are certainly catering to that focus on costs by offering tax breaks and other perks to attract foreign investment. Whether the solar industry can truly develop in those markets, however, remains open to question.” Jason Huang added.

Cells produced by Korean and Malaysian manufacturers, who have not been hit by the US anti-dumping and countervailing duties, are currently priced at US $0.40-$0.42, about 20.5% higher than those made by Taiwan firms.

That gives Taiwanese firms leverage to negotiate with customers. At the same time, while well established globally as high-efficiency cell producers, Taiwanese vendors are hampered by their limited access to export markets.

As a result, they face greater demand fluctuations. With that in mind, many Taiwanese firms are choosing to set up their factories in foreign countries close to major export markets.