EU solar firms demand probe into Chinese govt support for solar industry

Sep 26, 2012 - Solar industry association EU ProSun said on Tuesday it had filed an official complaint with the European Commission (EC), demanding the start of an investigation of certain practices of the Chinese government.

EU ProSun, whose head is acting as vice president and company spokesman of German Solarworld AG (ETR:SWV), claims that the practices of the Chinese state towards the local solar sector represent illegal government support. The organisation's president Milan Nitzschke noted that the Chinese government was preventing local solar companies from going bankrupt with massive subsidies, while in the meanwhile more than 20 major European solar manufacturers filed for insolvency in 2012 alone. These subsidies have stimulated overcapacity, hence, more than 90% of Chinese production had to be exported, Nitzschke said.

The complaint follows the recent launch by the EC of an an anti-dumping probe against Chinese solar product manufacturers. China exported solar products worth around EUR 21 billion (USD 27bn) to the European Union (EU) in 2011.

At the same time, Ben Hill, president of Trina Solar Europe which is part of Chinese Trina Solar Ltd (NYSE:TSL), notes that state support for the solar industry is not exclusive to China and that the solar industry worldwide is currently benefiting from public support.

At the beginning of September, the EC launched an anti-dumping investigation in response to a complaint launched on July 25 by EU ProSun. At the time, the association claimed that solar panels and their key components imported from China enter the European market at prices 60% to 80% below market value. A similar investigation earlier this year in the US lead to the introduction of preliminary anti-dumping tariffs on Chinese solar imports of up to 250%.

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