US trade panel to probe solar dispute with China

AP News
Posted: Dec 02, 2011 6:15 PM
US trade panel to probe solar dispute with China

A federal trade panel voted Friday to investigate whether Chinese companies are harming the U.S. solar panel industry by dumping low-price products on global markets.

U.S. companies' complaints about their Chinese rivals have been amplified by the controversy surrounding Solyndra Inc. _ a California-based solar panel maker that went bankrupt after winning a half-billion-dollar federal loan from the Obama administration.

American companies have asked the government to impose steep tariffs on Chinese solar imports, and the unanimous vote by the International Trade Commission means the case will continue.

The solar panel manufacturers have been struggling against stiff competition from China as well as weakening demand in Europe and other key markets, just as President Barack Obama is working to promote renewable energy.

The failure of Solyndra embarrassed the administration and prompted a lengthy review by congressional Republicans who are critical of Obama's green energy policies. Solyndra, which isn't involved in the ITC case, cited Chinese competition as a key reason for its failure.

The commission's vote does not impose any penalties but says there is reason to believe that Chinese imports harm or threaten to harm the U.S. solar panel industry. The companies that filed the complaint said the ruling affirmed their claims that massive subsidies by the Chinese government are enabling Chinese producers to drive out U.S. competition.

U.S. energy officials say China spent more than $30 billion last year to subsidize its solar industry. Obama said last month that China has "questionable competitive practices" on clean energy and that his administration has fought "these kinds of dumping activities." The administration will act to enforce trade laws where appropriate, Obama said.

SolarWorld Industries America Inc., the largest U.S. maker of silicon solar cells and panels and a subsidiary of Germany-based SolarWorld, is leading the U.S. complaint.

Ben Santarris, a spokesman for the Oregon-based company, called the decision to continue the case "a positive step toward restoring sustained international competition."

But the trade dispute has caused a split in the solar industry. Some U.S. companies argue that low-priced Chinese imports have helped consumers and promote rapid growth of the industry.

To counter the trade petition, a group of solar companies have formed the Coalition for Affordable Solar Energy. Members include California-based SunEdison, Recurrent Energy, SolarCity and Westinghouse Solar, as well as China-based Suntech Power Holdings Co.

The companies argue that the U.S. complaint could spark a trade war with China and raise prices for the entire industry.

"Every day that this trade dispute continues, more American jobs are threatened," said Jigar Shah, founder of SunEdison and a leader of the group opposing the trade complaint. The vast majority of the 100,000 jobs in the solar industry are in sales, marketing, design, installation and maintenance, Shah said, with only small percentage in manufacturing.

"These jobs depend on affordably priced solar panels, and companies would have to lay off workers if panel prices rose as a result of this petition," he said. "This trade dispute has already raised uncertainty and instability throughout the solar industry. We urge SolarWorld to withdraw its complaint and cease its protectionist trade practices."

A spokesman for the Chinese embassy declined to comment Friday.

China announced its own probe last month, saying it will investigate whether U.S. support for renewable energy companies improperly hurts foreign suppliers.

The announcement by China's Commerce Ministry comes after the Commerce Department said Nov. 9 it will investigate whether Beijing is inappropriately subsidizing Chinese solar panels.

Trade tensions with China are especially sensitive at a time when the United States and other Western economies want to boost technology exports to revive economic growth and cut high unemployment.

The United States and China are two of the world's biggest markets for solar, wind and other renewable energy technology. Both governments are promoting their own suppliers in hopes of generating higher-paid technology jobs.

Six senators and 53 House members _ all Democrats _ sent a letter to Obama on Friday supporting the trade complaint. The letter, led by Sen. Ron Wyden, D-Ore. and Reps. Edward Markey, D-Mass., and Sander Levin, D-Mich., said the case "underscores the need to ensure a level playing field for American businesses and workers, not just in the solar arena but for all clean-energy technologies."

In a related development, the U.S. Senate approved an amendment intended to ensure that "Buy American" requirements apply to all solar devices that power Defense Department property or facilities. The provision, attached to a defense bill, closes a loophole that allows some contractors to use foreign-made solar panels.


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