Europe Says Chinese Solar Manufacturers Violated Trade Laws
William Pentland Contributor
a clean energy wonk
After a nine-month investigation, the European Commission has concluded that China violated international trade laws by doling out cheap loans, land, interest-free lines of credit lines and tax breaks to solar equipment manufacturers.
More specifically, Chinese manufacturers of crystalline silicon photovoltaic (PV) panels, solar cells and wafers received government subsidies amounting up to 11.5% of their sales turnover.
The unfair provision of state aid allowed Chinese solar manufacturers to dump about 21 billion euros (18 billion pounds) worth of solar panels at below cost in Europe, which ultimately resulted in several European solar companies going out of business.
"Pervasive and all-encompassing Chinese subsidies are decimating our industry," said Ben Santarris of SolarWorld, a German solar panel manufacturer.
The list of solar casualties includes otherwise high-performing multinational conglomerates like Siemens and Bosch.
Chinese solar panel production quadrupled between 2009 and 2011 to more than the world's entire demand.
"There are clear indications that (the Chinese) government policy influences the decision-making of the banks when deciding on the terms of financing to solar companies," an anonymous source who declined to be named because the findings are not public told Reuters.
China claims that economies of scale rather than illegal subsidies allowed Chinese solar companies to sell equipment at below market prices.
China also accuses Europe of subsidizing its solar industry.
While providing consumers with incentives to purchase solar energy does not violate the rules of the World Trade Organization, providing companies with financial support to produce solar products does.
William Pentland
I am Vice President for Regulatory Strategy and Special Projects at Genbright LLC. The views expressed on this blog are my own and should not be attributed in any way to...