EU starts subsidy probe of Chinese solar panels

The European Union announced on Thursday the start of an investigation into Chinese manufacturers of photovoltaic solar panels.

The action came a day after the US International Trade Commission determined that imports of Chinese photovoltaic cells and modules have hurt the US solar industry.

Analyst said the decisions will lead to a trade war in the global renewable energy market, which will impede the development of solar energy technology.

The EU's investigation into whether the Chinese government gives subsidies to solar panel manufacturers comes after a separate European inquiry looked into charges that Chinese companies were selling photovoltaic solar cells into the European market below cost, a practice known as dumping.

The anti-subsidies case involves 21 billion euros ($27 billion), making it the largest case of its type initiated by the European Commission, the European Union's executive body.

The commission started on Sept 6 to investigate whether Chinese manufacturers have dumped solar panels on the EU market.

The two cases in Europe stemmed from complaints made by EU ProSun, an solar industry group led by Germany's SolarWorld AG.

The new anti-subsidies investigation is to last for 13 months, after which a ruling will be issued. The commission will then have nine months to decide if it will impose provisional anti-subsidy duties.

A day before the EU's announcement, the United States said it will impose punitive tariffs of up to 250 percent of the cost of photovoltaic solar panels imported from China over the next five years.

The tariffs, though, will not be imposed on solar modules that are assembled in China using cells purchased in a third country.