As we await the EU’s decision on the import tariffs due to be imposed on Chinese solar panel makers, the world is forecasting a grave solar future. If the tariffs are given the green light, our ‘green’ future is threatened. It has been said to be a ‘no win’ situation.

The idea is that a tax on Chinese solar manufacturers will stop low cost solar panels from flooding the European market and give local manufacturer’s a fighting chance in the industry. However, it has been said that imposing these taxes will not only cause Chinese solar company closures or mergers but it will also cause an increase in pricing to investors which in turn will threaten new renewable investments across Europe. Many solar farm investors are saying that if the import tariffs are introduced, building and investing in new solar farms may no longer be a financially viable option. Some are saying it is too little too late – many of the ‘solar cowboys’ have already fallen out of the market.

Bloomberg Chief solar analyst, Jenny Chase said, “An increase in prices that is a major concern for Chinese producers as well as developers in the region, who may find that many solar projects are no longer viable. The proposed anti-dumping tariffs are higher than the industry expected.”

According to IHS research, solar panels such as Trina or Yingli panels may cost as much as $0.97 per watt basically overnight and slow demand. Chief financial officer of Trina Solar said, “No one wins. Demand in Europe will be squeezed. It will drive out investors; they won’t invest because the margins are so low.”

Chinese imports into the EU in 2011 alone were worth $21 billion euros with Europe account for half of the global market.

With rumours that China are ready to take legal actions should the taxes come to pass, it is a decision that could affect all trade, not just solar panels. Australia does a fair amount of trade with China, should a tax be imposed here (as some are pushing for) there could be bigger repercussions affecting all industries.

If there are any ‘winners’ in the situation, it would be Taiwanese and Malaysian solar panel importers as they will then offer the cheapest solar panels on the market. However, the basic bottom line is that an overall increase in prices will lead to a decrease in demand in the market.