The United States Commerce Department said that it would start a probe on whether Chinese companies sell their solar panels in the country at unfair discounts as well as receive government subsidies illegally.
This is a sensitive economic issue between the United States and China. The probe could lead to higher taxes on Chinese imports, which could help the domestic solar manufacturers. The investigation is opposed by companies in the United States solar industry, which depend on cheap solar panels from China to improve their solar power production.
The investigation came in time when President Barack Obama’s administration is being criticized by the Republicans in Congress with regards to domestic aid to solar power companies. SolarWorld AG, which is one of the largest solar product manufacturers in Germany, asked the US government to impose duties on Chinese solar cells and panels.
The company said that Chinese exporters enjoy perks that are anti-competitive in nature. It threatens to wipe out other producers as well as jobs. Because of the probe, one of China’s solar power plant developers placed on hold its plans to construct a power project in California, Texas, and New Jersey. It is afraid that the duties could make the plan more expensive.
The solar coalition additional duties to be given to offset Chinese government subsidies, which include cheap raw materials, tax breaks, discounted costs, export insurance and export assistance grants. They want the playing field to be leveled.
The United States International Trade Commission will investigate the issue and vote on December 5 to determine whether there’s enough evidence that Chinese solar companies hurt domestic companies. The ITC has the last say on whether additional duties should be imposed.
The Commerce Department would release its preliminary decisions with regards to the duties in January and March. According to records, imports of solar panels from China increased to $1.5 billion in 2010 from just $640 million in 2009. A group of 25 solar companies based in the United States opposes the trade case, which they say would threaten at least 100,000 jobs in the country.
The Coalition for Affordable Solar Energy includes US-based companies MEMC Electronic Materials and Solar City. It also includes US-branches of Chinese companies Yingli Green Energy and Suntech Power Holdings. If duties were imposed, prices for solar power will increase and solar energy in the United States will decrease.