More Solar Outrage Over EU Probe

Doug Young

The headlines are filled this morning with chatter on the latest news that the European Union is launching an anti-dumping probe into Chinese solar panel makers, following a similar investigation by the US that is likely to result in punitive tariffs by the end of this year. In addition to news of the probe itself, most of the major Chinese panel makers have issued their own statements protesting the move, and Beijing has also expressed regret over the decision. Rather than always turning to these predictable displays of outrage and disappointment each time they receive a setback in this year-long dispute, the Chinese players might consider trying a more conciliatory approach if they really want to avoid a trade war over an industry that everyone agrees will be critical to the development of long-term sustainable energy sources.

In a widely expected development, the EU on Thursday announced it was launching a probe into allegations that Beijing unfairly supports Chinese solar panel makers through policies like low-interest loans and export rebates. (English article) That probe follows a similar US investigation that resulted in a recommendation that punitive tariffs be levied against Chinese panel makers in May. (previous post)

The response from China to the new EU probe has been quite predictable, mostly because we've heard similar howls of protest at each development in this long and increasingly tortured process that has cast a spotlight on the differing approaches to government support for emerging sectors in China and the West.

Beijing responded by saying it deeply regrets the EU decision, adding that any punitive action will only hurt everyone. Suntech (NYSE: STP), Yingli (NYSE: YGE) and Trina (NYSE: TSL), 3 of the top industry players, all responded with their own statements of protest, again emphasizing the message that the allegations are unfounded and any punitive measures will only hurt the entire industry.

Rather than always make these same protests of their innocence, I'd like to suggest that both Beijing and the Chinese solar companies try a more conciliatory approach to resolve the dispute before it spirals out of control and really does hurt the industry, which is already suffering from a massive supply glut. It's not often that both the US and Europe launch such similar investigations against a specific industry, which should tell Beijing that perhaps many of the complaints are really valid.

Accordingly, government leaders in Beijing should sit down with the solar companies and the local governments that are their biggest supporters and try to work out a comprehensive plan to wean the industry from state support. They can then take that plan to the US and EU, and use it to show their sincere desire to diffuse this issue.

In the meantime, market forces could soon help to diffuse the dispute as well by forcing many of the Chinese players to de-list their stocks as they slowly sink into insolvency. Suntech and JA Solar (Nasdaq: JASO) have both seen their shares trade below the $1 mark for around a week now, and 30 days below the $1 level would trigger a de-listing notification. LDK (NYSE: LDK) and Renesola (NYSE: SOL) are also trading near the $1 mark, and could easily slip below that level in the next month or 2. A coordinated plan from Beijing to resolve this trade dispute could spark a rally in these companies' shares, helping to not only revive their stocks but also their longer term business prospects.

Bottom line: Beijing and China's solar panel makers need to develop a comprehensive plan on weaning the sector from unfair state support to avoid trade wars with both the US and EU.

This article was originally posted by Young's China Business Blog and was reprinted with permission.

Lead image: Flag of China via Shutterstock.

The information and views expressed in this article are solely those of the author and not necessarily those of or the companies that advertise on this Web site and other publications.


Largest Cherokee County wind farm now under construction

After a 23-year wind farm construction hiatus, work on a 2nd Cherokee County wind farm has begun. Developed by San Di...

Nine solar projects go live in Georgia

Duke Energy Renewables, a subsidiary of Duke Energy, announced that nine solar projects developed with SolAmerica Ene...

Can Italy strike twice?

Italy’s National Energy Strategy aims to increase wind and solar power’s share of gross final energy consumption by 2...

Lekela reaches financial close for its West Bakr Wind project

Lekela announced that it has reached financial close on its first wind project in Egypt, West Bakr Wind. Constru...



What You Need to Know About Air Pollution: Its Importance and Effective Solutions

Air pollution is now one of the most pressing environmental concerns. While nine out of the ten most polluted cities ...


Supporting the Geothermal Tax Credit

Under Gov. Andrew Cuomo’s leadership, New York has ramped up its role as a trend-setter in the transition to clean en...


Top 5 Hybrid Energy News (Solar- and Wind-Diesel-Hybrid + Microgrids) – October 2016

The October edition of our “Top 5 Hybrid Energy News” features KarmSolar, SolarAfrica, Singita, Tesla, Sungrow, Aquio...


Renewables Become Mobile: Redeployable Solar-Wind-Diesel Plus Storage Solutions For Mining Exploration

Mining or mineral exploration is the mining process of finding ores. Due to the remote locations, power generation fo...


Doug Young has lived and worked in China for 15 years, much of that as a journalist for Reuters, writing about publicly listed Chinese companies. He currently lives in Shanghai where he teaches financial journalism at a leading local university. He also writes daily on his blog, Young’s China Business Blog (, commenting on the latest developments at Chinese companies liste...


Volume 19, Issue 6


To register for our free
e-Newsletters, subscribe today:



Renewable Energy: Subscribe Now