SolarWorld, a subsidiary of a German company and the largest U.S. maker of solar panels, recently laid off 66 workers at a California plant. Santarris said that over the past 18 months seven solar manufacturers in the United States have shut down or cut back production.
The companies complain that China has aided its solar companies with low-interest loans, cheap land deals and lax environmental standards that lower costs. In addition, they say that China’s currency, which is generally believed to be 10 to 35 percent undervalued, makes Chinese exports cheaper than they should be. Moreover, they allege that many of the Chinese companies are losing money on their U.S. sales, a tactic designed to grab market share and drive U.S. competitors out of business.
Labor costs, which make up less than 10 percent of solar panel production costs, are not a key factor.
“We can compete with any country in the world,” Santarris said. “However, it is very difficult for us to compete with the Communist Party of China.”
The dumping case, which calls on the Commerce Department to impose countervailing duties, comes against a background of new controversy over U.S. imports of Chinese goods. The Senate has adopted a currency bill that would require U.S. countermeasures against any country artificially maintaining an undervalued currency, regardless of the country’s intent. The House has not yet taken up the measure.
In addition, the recent bankruptcy of Solyndra — a California firm that had $535 million in federal loan guarantees to support the manufacture of an innovative type of solar panel — sparked an outcry among other U.S. solar companies about the pressure from Chinese imports.
Over the past two years, the Commerce Department has weighed a variety of complaints against Chinese imports. Last week, it said it would impose duties on a Beijing maker of high-pressure steel cylinders. In April, it made a preliminary decision to slap stiff penalties on Chinese-made coated paper. It also has reviewed complaints on steel wire and drill pipe, wooden bedroom furniture and petroleum wax candles.
Investigations by Commerce and the International Trade Commission can take 12 to 18 months, though temporary duties can be imposed in six to seven months if the agencies make a preliminary finding of dumping.
“A lot of the trade investigations will be tricky,” Joanna Lewis, a professor at Georgetown University’s School of Foreign Service said, noting that the economic system in China is less transparent than in the United States. “It is very hard to know what the terms are for Chinese companies.”
The seven solar panel companies alleging dumping have formed a Coalition for American Solar Manufacturing. The more-established industry group, the Solar Energy Industries Association, did not join the action. The current SEIA chairman, Roger Efird, is managing director of Suntech America, a unit of China’ s biggest photovoltaic panel maker.
SolarWorld, whose U.S. operations are based in Oregon, announced the dumping case Wednesday with Oregon’s U.S. senators, Democrats Ron Wyden and Jeff Merkley.