HONG KONG — The United States and China are gearing up for a trade war that could catch American users of solar energy in the crossfire.
The Commerce Department in Washington on Wednesday opened an investigation sought by American manufacturers who accuse the Chinese of "dumping" solar panels into the United States at prices, aided by government subsidies, lower than the cost of making and distributing them.
Anticipating that move, the Chinese solar industry has been unusually vitriolic this week. A government-controlled trade group accused the White House of turning the commercial complaint into "a political farce, which is very likely a publicity show initiated by the Obama administration for the coming election."
Meanwhile, a new American trade group was formed this week, representing buyers and installers of solar energy systems. It argues that any new Commerce Department restrictions on Chinese solar panels would slow the adoption of clean energy technology in the United States and could cost thousands of U.S. jobs. Some environmentalists also oppose policies that might slow the adoption of solar energy.
Solar power is a politically fraught issue in Washington, in part because of the bankruptcy this summer of a solar panel maker, Solyndra, after it had received more than $500 million in federal loan guarantees.
The use of solar energy in the United States is growing fast, but Chinese solar panel manufacturers have been growing even faster, raising their American market share to more than half, from almost none five years ago.
Although solar energy now contributes only about one-tenth of 1 percent of American electricity, the amount of new solar wattage installed in the United States has been growing more than 70 percent a year since 2008, according to GTM Research, a renewable energy market analysis firm in Boston.
Seven U.S. manufacturers filed a legal petition on Oct. 19 seeking the Commerce Department investigation and asking that tariffs of more than 100 percent be imposed on solar panels from China. The filing accused the Chinese industry of using billions of dollars worth of government subsidies to help gain sales in the U.S. market and dumping panels at very low prices.
Under American trade laws, Wednesday was the deadline for the department to either begin a formal inquiry — unless it judged the case to be groundless — or find that few companies manufacturing panels in the United States actually supported it.
Whatever action the U.S. government might take, it could prove too late to save the American solar panel industry. China, whose government has been a big promoter of green energy companies, already accounts for 60 percent of the world's solar panel production, giving it enormous economies of scale.
And it exports 95 percent of its production, much of it to the United States, rather than using it within China. That has helped push wholesale solar panel prices down sharply — from $3.30 a watt of capacity in 2008 to about $1.20 today. A typical solar panel might have a capacity of 230 watts.
Although plunging prices could speed up the adoption of solar power, the American industry contends the Chinese are simply not playing fair. Besides Solyndra, two other American solar companies that together represented one-sixth of American manufacturing capacity in the sector went bankrupt in August, while four other American solar companies have laid off workers and cut output since spring of last year.
Chinese industries have lost almost all of the anti-dumping and anti-subsidy cases against them for decades because the United States still categorizes China as a nonmarket economy, which means that special rules are used that tend to favor the American industry.