PV companies refute illegal subsidizing accusations

Several heavyweight Chinese photovoltaic (PV) manufacturers have denied receiving illegal governmental subsidies as alleged by some of their European counterparts.

They also accused the Chinese makers of dumping two months ago.

EU ProSun, an alliance of European solar equipment manufacturers, on Tuesday filed an anti-subsidy complaint with the European Commission, urging it to launch a probe into whether the Chinese government has subsidized the country's PV industry in conflict with rules of the World Trade Organization.

Chen Kangping, chief executive officer of the world-leading PV producer, JinkoSolar Holding Co., Ltd., told Xinhua the company rejected the claim that it has enjoyed government-granted privileges in terms of land use and bank loans.

"We obtained land fully in line with market price, without saving a penny under any 'special policies'. Also, we took bank loans at normal market rates and didn't receive any governmental subsidies," Chen said.

However, Milan Nitzschke, President of EU ProSun, said in a Tuesday statement that "Chinese banks implement government policy by giving very low interest rates to solar manufacturers, and, if the borrower cannot pay back the loan, it may be written-off, extended indefinitely or paid off by other government-controlled entities."

The statement also claimed that regional and local subsidies have been granted, such as repayment of interest, electricity costs, transaction costs for land, value-added tax as well as credit guarantees.

China's solar product exports were valued at 35.8 billion U.S. dollars in 2011, with the European Union (EU) receiving a share of more than 60 percent.

Chinese PV companies are basically all privately owned and the industry is growing in accordance with market rules, Chen said. "There's no such problem of illegal subsidizing."

Based in the city of Shangrao in eastern Jiangxi Province, JinkoSolar was among the only two, out of 11 Chinese solar manufacturers listed on the New York Stock Exchange, that managed to gain profit in 2011. But it reported a loss this year.

In spite of losses caused from over supply, Chinese PV producers are continuing to provide the EU with cheap clean energy, Chen said. "They have made remarkable contributions to the solar market in Europe."

He also noted that the EU needs to take cautious consideration on whether to impose anti-subsidy tariffs on Chinese solar exports, as the move would lead to a surge in the cost of solar use in Europe.

Another New York-listed Chinese PV tycoon, Yingli Green Energy Holding Company Limited, also spoke out against its European rivals' accusations.

"As a publicly-traded company listed on the New York Stock Exchange, we have been fully transparent with our funding sources and cost," Miao Liansheng, chairman of the company based in Hebei Province, said in a Wednesday statement.

"We do not and have never received any illegal subsidies from the government," Miao said.

Darren Thompson, Yingli Green Energy Europe GmbH managing director, warned that possible tariffs would threaten thousands of jobs in the industry and in particular, "small and medium-sized companies in Europe would be hit hard".

In late July, EU ProSun, led by the German company SolarWorld, filed an anti-dumping complaint with the European Commission against Chinese major PV companies, prompting the regulator to start a 15-month investigation earlier this month into whether the Chinese makers sold solar products below cost.

"If this anti-subsidy probe is also verified, that would be a double whammy for China's solar industry," said Shi Zhengrong, chairman of Suntech Power, which is based in Jiangsu Province and the world's largest producer of silicon solar modules.

Shi believed Eu ProSun called on the anti-dumping and anti-subsidy investigations because they have been put at a disadvantage during price competition with Chinese PV manufacturers and many have ended up bankrupt.

"So, they have to resort to protectionism, as the last bullet, to defend themselves," Shi said.

The Chinese government has rolled out measures to boost its domestic solar market in order to wean the country's PV industry off dependence on overseas markets amid mounting trade frictions with EU and the U.S..

The National Energy Administration has required local authorities to make plans for establishing distributed PV generation demonstration centers by mid-October.

Each provincial-level region was allowed to apply to establish no more than three solar energy demonstration areas with a total installed capacity not exceeding 500,000 kilowatts, according to the statement.

China will install distributed power photovoltaic generation systems providing 10 million kilowatts of installed power capacity, according to the 12th Five-Year Plan (2011-2015) on solar power development, issued by the administration in early September.

The plan states that investment in distributed solar power generation is expected to reach 150 billion yuan (23.81 billion U.S. dollars) by 2015.

To seek new profit-growth spots, some Chinese PV companies said they have planned to engage in design, development and operation of photovoltaic plants and provide systematic solutions and services in this regard, rather than solely focusing on producing and selling PV modules as before.