Nations urged to settle solar dispute via dialogue

German Chancellor Angela Merkel said she hopes the ongoing solar dispute between Chinese and European photovoltaic companies can be solved through talks instead of launching an investigation, the chancellor said during her visit to Beijing on Thursday.

"To solve the anti-dumping dispute through conversation is an important agreement reached between the two governments today, a showcase of a great way to resolve trade controversy," said Premier Wen Jiabao.

The European Commission will decide whether to launch the investigation in September, 45 days after SolarWorld AG filed its complaint on July 24.

Europe is China's largest solar market and accounts for about 70 percent of the global market. China imports key equipment for solar-product from Germany, as well as polysilicon, a raw material for PV solar panel production.

China imported 40,000 tons of polysilicon in the first half of the year, up 34 percent year-on-year, according to the latest figures from the General Administration of Customs. Germany accounts for 20 percent of these imports.

Some German companies such as polysilicon makers and equipment manufacturers, who count China as a major customer, are against the investigation.

The world's second-largest polysilicon maker, the Germany-based Wacker Chemie AG, is opposing the filing, which seeks import tariffs on solar goods from China. "We are convinced that protectionist measures will not help the domestic solar industry, but rather impair the PV technology's future prospects," the company said in a statement.

Yingni Lu, director of Ecoleap Ventures, a London-based consultancy, said that putting limits on Chinese solar energy companies' ability to export would hurt European energy users.

"If the price of solar energy becomes more expensive for European energy users, they may switch back to traditional forms of energy, which makes Europe's push for alternative energy harder," she said.

Lu added that the key difference between China and Europe's solar industries is not the amount of subsidy, but the format of it.

"In China, companies developing solar energy technology receive some financial help from the government, which allows them to grow in size and eventually achieve economies of scale. This is a good thing, but there is no way to ensure that this financial help will make the whole industry more efficient, educate more companies or drive the research and development work of the whole industry forward."

"In Europe, by comparison, end users of solar energy receive financial help from the government. End users have to consider their costs, and will only choose to use solar energy if the costs are not significantly higher than traditional energy sources. For example, the system used in countries like France, Germany and the UK is the feed-in tariff system."

Under a feed-in tariff, homeowners and businesses are paid a cost-based subsidy by the government for the renewable electricity they produce, which includes solar, wind, tidal and others. "The leaders of both China and Europe should recognize this difference of the two systems, and have more mutual tolerance in their discussions," she said.

Meanwhile, China's major solar energy enterprises have appealed to central and local governments to oppose the EU's anti-dumping complaint against Chinese solar panel producers during Merkel's two-day visit to China that started on Thursday.

"We have just written a letter to Jiangsu province and also submitted a petition to the central government to appeal for support on opposing EU's probe," said Zhang Jianmin, senior manager of corporate communications at Suntech Power Holdings Co, one of China's major PV producers.

Other companies like Trina Solar Ltd and Canadian Solar Inc have also appealed for government help, sources were quoted by China Business News as saying on Wednesday.

Six US solar panel manufacturers, including SolarWorld USA, accused Chinese companies of selling panels in the US market at prices below cost. In May, the US announced anti-dumping duties on Chinese solar equipment makers ranging from 31 percent to 250 percent.

Contact the writers at liuyiyu@chinadaily.com.cn, chengguangjin@chinadaily.com.cn and cecily.liu@chinadaily.com.cn