China gathers panel of top solar execs to address EU dumping claims

China has set up a panel of executives from top domestic solar photovoltaic companies to help deal with allegations that the nation is dumping cut price PV products in the German market, in possible breach of international competition laws.

The move comes as German solar industry association Bundesverbandes Solarwirtschaft contemplates legal action over the alleged dumping, with a final decision to be made by the end of the year.

"We will take it to [the European Union in] Brussels if we observe distortions of competition," the trade and lobby group's managing director Carsten Koernig told Reuters news agency.

The China panel members include representatives from PV companies that include
high profile firms such as Suntech Power Holdings, Yingli New Energy Resources and JA Solar. It is being headed by Suntech chief executive Shi Zhengrong.

The panel, organised by the Ministry of Commerce and announced last week, is set to travel to Europe in November to meet with members of the European PV industry, according to China’s Global Times newspaper.

Last month, German companies SolarWorld and Conergy filed a petition to their national government and the EU, claiming that Chinese solar panel and cell makers received improper subsidies. They contend that German power generation firms should not source products manufactured in China.

Chinese PV products currently cost about 20 per cent less than German-made counterparts. If Germany fails to stem cheaper imports of PV equipment, there is a danger that the domestic industry may be severely – and irreversibly – impacted, particularly given that prices are already falling as a result of global oversupply.

Until recently, Germany led the global PV industry, thanks largely to the Renewable Energies Act, which ensures that solar energy producers are paid a feed-in tariff that is among the highest in the world. The cost is then passed on to Germany's electricity users.

However, the global economic downturn, combined with growing competition by Asian rivals with lower production costs, has put German PV companies at risk of financial ruin.

"Many of the German solar cell and module manufacturers will not outlive this crisis," UBS analyst Patrick Hummel told Financial Times Deutschland last month.

Ironically, China has Germany to thank for a recent increase in orders for Chinese solar panels, with Suntech claiming earlier this month that Germany led demand for its products.

China is the world's largest maker of solar cells, and probably the biggest exporter of the product, with more than 90 per cent of manufacturing output shipped overseas to Germany, Spain, Japan and the US, among other countries.

Chinese PV companies have seen their production costs come down over the past year, due to government subsidies on large-scale solar power projects and also smaller installations.

However, China denies that its PV equipment is dumped overseas. "Chinese solar cell and module makers have taken advantage of the low costs brought [on] by the financial crisis and never practise dumping in overseas markets," Yu Ruozhen, of solar module exporter Phono Solar Technology, told the state-run Xinhua news agency.

The Global Times quoted unnamed industry sources as saying that in Germany the price gap between imported Chinese PV products and their domestically-made equivalent was "not big" and therefore the dumping claims were unfounded.