On October 19, a coalition of nine U.S.-based solar manufacturers announced a trade action with the Department of Commerce, claiming that China was dumping solar panels on the U.S. market. The Department of Commerce opened the case for hearings on November 8. China has already announced that setting tariffs on Chinese solar PV cells would have consequences on American exports to China, and some American solar companies fear the effect of a tariff on the American solar market.
The Coalition for American Solar Manufacturing (CASM), a coalition of seven American solar manufacturers, is led by SolarWorld, an Oregon-based manufacturer. The six other companies have chose to remain anonymous. The coalition argues that China is using unfair subsidies to drive down the price of solar PV. The effect in the American solar market has been the bankruptcies of some American solar companies such as Evergreen and Solyndra. The action is asking for a tariff of over 100% on Chinese-made solar photovoltaic cells. "China is cheating on global trade rules," Gordon Brinser, the President of SolarWorld said. He added that "China's state-sponsored solar industry is receiving massive illegal subsidies and is illegally dumping crystalline silicon solar products into the U.S. market," which is threatening to eliminate the U.S. from solar manufacturing. The U.S. International Trade Commission has opened an anti-dumping and countervailing investigation.
President Obama, in an interview with an Oregon news channel, said that China sometimes has "questionable competitive practices" and that the U.S. will "look very closely" at China's solar industry and bring actions if the International Trade Commission finds that the "basic rules of the road have been violated."
China's Commerce Ministry called the investigation a "lose-lose" situation for both countries, cautioning that imposing anti-dumping tariffs on Chinese solar panels would affect U.S. equipment and raw materials exports to China. In response to the accusations, China has said that the economic recession, cheap access to raw materials, increased capacity and improved technology are all the reason for the reduction in prices of photovoltaic panels, and denies any dumping activities. Both China and the U.S. are currently attending the Asia-Pacific Economic Cooperation (APEC) Leaders' Meeting in Hawaii, in which the U.S. is pushing for a voluntary 5% cap on environmental goods and services tariffs among the APEC nations. China sees this as contradicting the CASM action, stating, "if the United States really wants to promote free trade of solar panels, why does it frown upon cheap Chinese solar panels?"
Other solar companies say China's investment has benefited U.S. customers because of the 30% drop in solar panel prices. They have created a rival Coalition for Affordable Solar Energy (CASE), comprised of Carbon War Room, MEMC, SolarCity, SolarFirst, Sungevity, Suntech America, SunRun, Trina Solar, Verengo, Yingli Americas, Recurrent Energy, and others. CASE argues that without the price drop in solar energy, the solar industry might not have been the fastest growing sector in the U.S. economy. CASE warns that "placing protectionist barriers against more efficient and affordable solar cells -- whatever their origin -- discourages innovation and investment." In fact, Chinese solar plant developer CECEP Solar Energy Technology put a $500 million solar project on hold due to the petition, stating that "if the solar panel prices increase by say, 30 percent in the United States, following the move, then we would certainly drop the plan because there's no profit to be made," according to an article on GreenTech Media.
Other similar large-scale projects could also fail to get built due to increased and unplanned-for costs. This solar trade fight could be a "circular firing-squad in which everyone gets hurt."