China keeps coming out with new ways to protect its beleaguered solar panel industry which is facing the wrath of the Western governments. Note China exports more than $30 billion of solar modules to Europe and USA. China has already launched two internal probes in response to the anti dumping and CVD duties by USA and investigation by European Union. Note both these probes relate to imports of polysilicon which is the raw material used in manufacture of solar panels. However these probes lacked bite because if China imposes duties, it will hurt its own solar panel manufacturers more. Also Chinese polysilicon quality is not as good as that of Western and Korean poly producers.

China has now gone to WTO to complain about domestic content rules of Italy and Greece. Note these countries give more favorable treatment to solar panels made in Europe. This was in response to the massive failures of European solar manufacturers. However China had not complained till now as Chinese solar panels were cheaper even with these rules. Note domestic content rules are also prevalent in Ontario, Canada (Japan has complained already) and in India (USA has protested but not gone to WTO).

China is trying to use legal remedies to soften the blow on its solar panel industry which is already seeing a large number of failures. Chinese local governments are keeping these failed companies on life support (LDK, Suntech, CNPV) through loans and grants. If the EU investigation finds fault and imposes duties on solar panels then it will mark the death knell for a large portion of the solar industry. Note China has a PV installed capacity of 40-50 GW compared to the global demand of only 30 GW.

Read our earlier post on Why Trina, Yingli and Suntech have become desperate

The biggest Chinese solar panel producers like Sunech, Trina ,Yingli and Canadian Solar have come out strongly against the recent filing of a complaint of dumping of Chinese solar panels in Europe. Solarworld which is the biggest German solar panel company has led a group of 25 European solar companies in filing a complaint against the dumping of solar modules made in China. Note Solarworld had earlier successfully managed to champion an anti dumping duty on China made solar panels, in the USA. In recent days, the Chinese Government has initiated the process of paying back the USA in the same coin by starting an investigation of US polysilicon imports. While that had led to feeble protests from the Chinese biggies, they had already prepared workarounds for the anti dumping duty.

Reuters

China opened a second front in a solar power war with Europe on Monday, lodging a complaint with the World Trade Organization to challenge policies that Beijing argues favour firms in Italy and Greece. By lodging its complaint, China triggers the formal process for a WTO dispute and, if talks with the EU fail to resolve the issue, after 60 days it could ask the global trade body to adjudicate. The two EU states offered a higher electricity price to solar power producers that used mainly locally sourced components, it said.

Read about Sun Earth Solar Panel & Yingli Solar Panel Reviews on GWI.