U.S. starts investigation of Chinese solar firms

11/10/2011

WASHINGTON -- The U.S. Commerce Department said Wednesday it will investigate whether Chinese companies sell solar panels in the United States at unfair discounts and receive illegal government subsidies.

The trade spat, one of several sensitive economic and trade issues between the United States and China, could lead to steep duties on imports of Chinese panels and help struggling domestic manufacturers.

The action is opposed by companies in the U.S. solar industry that count on importing cheap panels to boost solar power generation. It does not pertain, however, to the thin-film-panel industry, which includes Toledo-born First Solar Inc. and Xunlight Corp. of Toledo.

The decision was announced as the Obama Administration faces criticism from Republicans in Congress about domestic aid to solar and other renewable energy companies.

The Commerce Department said it accepted a petition from SolarWorld Industries Americas Inc., which asked the government last month to impose duties on Chinese solar cells and modules.

SolarWorld is the U.S. arm of SolarWorld AG, one of Germany's largest solar product manufacturers, which closed a California plant this year because of a steep drop in solar panel prices.

This week, China's largest solar power plant developer put plans for California, New Jersey, and Texas on hold because of concerns that duties could make the plant too expensive.

The solar coalition also wants additional countervailing duties to offset Chinese government subsidies including tax breaks, cheap raw materials, discounted land, export insurance, and export assistance grants.

The U.S. International Trade Commission, which has the final say on whether duties are imposed, is to examine the issue and vote Dec. 5 on whether evidence of injury to U.S. companies is sufficient for the case to proceed.

The Commerce Department would then make its preliminary decisions on duties in January and March.

Imports of solar panels from China rose to $1.5 billion in 2010 from $640 million in 2009, the department said.

The 25-member Coalition for Affordable Solar Energy opposes the trade case, saying 100,000 jobs in the U.S. industry would be threatened.

The group includes U.S. companies MEMC Electronic Materials Inc. and Solar City as well as the U.S. arms of Chinese companies Suntech Power Holdings and Yingli Green Energy.

"If they succeed, prices for solar will go up, demand for solar energy in the United States will go down, and the U.S. solar market will be significantly undermined," said Kevin Lapidus, senior vice president of legal and government affairs for MEMC's solar project development unit, SunEdison.