There Goes the Sun

The EU, is threatening to impose anti-dumping duties on Chinese solar panels. But a new tariff war offers no way out for an industry that is already in distress and in which everyone – Europe, China, and the environment – stands to lose.

PARIS – The solar industry is in disarray, with companies closing down worldwide and the rate of solar-panel installation slowing. Now, the European Union, claiming that solar panels from China are being sold below cost, is threatening to impose anti-dumping duties. But can new trade tariffs really offer a way out of the current situation, in which everyone – Europe, China, the photovoltaic (PV) industry, and the environment – stands to lose?

In fact, the EU has already imposed a provisional duty of 11.8%, which took effect on June 6. Unless Chinese and EU officials reach an alternative agreement by August 6, the duty will rise to 47%. Such a rate would undermine further the proliferation of solar power, a key feature of strategies for enhancing energy security and reducing greenhouse-gas emissions.

The PV industry’s current predicament stems from a legacy of government subsidies and cheap credit. Until recently, Europe was encouraging the installation of solar panels by guaranteeing feed-in tariffs for the electricity generated, while China provided strong incentives to stimulate the growth of its PV industry.

We hope you're enjoying Project Syndicate.

To continue reading, subscribe now.



Register for FREE to access two premium articles per month.