EU Settles with China Over Solar Panel Trade Policies

After many months of negotiations, the European Union (EU) has finally brokered a settlement with China’s Chamber of Commerce regarding the price at which it exports solar panels to European countries. The agreement could have consequences for the U.S. solar panel market, where a similar controversy has erupted over recent years about Chinese “dumping” of photovoltaic (PV) panels.

The New York Times reports that under the terms of the new deal, Chinese solar panel manufacturers cannot sell their products to EU members for less than 56 euros ($0.74 cents) per watt. Those companies that refuse to comply will be subject to a 47.6 percent “anti-dumping” tariff.

The deal was thought by some to be less favorable to the EU than had originally been hoped. The European Commission had launched an investigation into the Chinese practice of dumping in September 2012, hoping that it could pressure China into raising the prices of its panels, making European-manufactured solar cells more competitive.

The practice of dumping, in which China floods a market with low-cost panels, thereby forcing competitors to lower their pricing, has been controversial in the U.S. as well. The Department of Commerce levied a 31 percent tariff in May 2012.

It’s important to note that the cost of going solar will likely continue to fall even with the tariffs in place. GreenTech Media Research, a solar industry research publication, predicts that the cost per watt of solar panels will fall from 50 cents at the end of 2012 to 36 cents by 2017.

The key to wider integration into the electrical grid of solar panels for homes is how the costs of these PV systems compare to natural gas and coal power. A drop in the price of panels will have a positive impact on the availability of solar to residents and businesses in Los Angeles and Orange Counties.