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Cheap Chinese Solar Panels Spark an EU Civil War

For a union, Europe can’t seem to agree on much. The latest disagreement is over whether to tax imports of Chinese solar panels. Some countries see the flood of cheap Chinese solar panels as cheating. China has propped up its solar industry with subsidies, and many believe its companies are foregoing profits and selling their panels below cost, killing that segment of the solar industry in Europe. For that reason, the EU’s trade commissioner proposed a 47 percent anti-dumping levy on Chinese solar panels.

While these levies would protect European panel manufacturers, they would likely cripple Europe’s solar energy industry, which has become heavily reliant on China’s cheap panels. That prospect has many member states worried, including solar-hungry Germany. The FT reports:

According to diplomats, trade officials and other people involved in the case, at least 14 of the EU’s 27 governments have rejected duties, with some putting the number as high as 17.

Berlin’s opposition is particularly significant since it is the bloc’s largest economy and its biggest trading partner with China.

Government subsidies at every level of the production chain have wildly distorted the global solar market. If solar was ready to compete on its own, it wouldn’t need billions of dollars in state funding, and we would see fewer of these global trade issues.

There’s an even bigger problem for those in the Europe and the US who see clean tech as a solution to the jobs crisis: globalization. Even without subsidies, China can produce cheaper solar panels than Europe, just as it already does with manufactured goods from textiles to toys. There’s no reason this same principle shouldn’t apply to solar panels just because they’re “green.” Europe is learning the hard way that calling something green doesn’t exempt it from economic realities.

[Solar array image courtesy of Wikimedia]

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