United States: International Trade Actions Complicate Global Market For Renewable Energy Businesses, Particularly Solar Sector

A number of recent trade actions involving renewable energy, particularly in the solar sector, are complicating the business landscape domestically and globally for a wide range of entities operating in these industries. In light of finite demand and increasing global production capacity of renewable energy resources, governments have brought trade actions on behalf of their domestic industries in the World Trade Organization (WTO) in Geneva. Domestic industries in the United States, China, the European Union, and India have brought trade remedy actions under their respective country's trade remedy laws seeking to curtail import competition. Decreased prices for various alternative sources of energy, such as natural gas and coal, pose additional challenges for the renewable energy sector that further complicate strategic decision making by renewable energy industry members, their existing and prospective customers, their investors, and even the governments that are administering the trade actions. All parties involved, from developers and producers of solar or wind projects to distributors and installers of energy systems, are well advised to monitor and consider carefully the impact of these trade actions on their businesses.

World Trade Organization Dispute Settlement. Three of the four renewable energy-related trade actions now pending before the WTO involve challenges to solarsector domestic content requirements, including domestic content requirements of solar sector feed-intariff (FIT) programs. FIT programs provide domestic solar energy producers with long-term guaranteed revenue contracts at favorable prices. The FIT programs being challenged in the WTO allegedly favor domestic producers in violation of international rules because they make the guaranteed purchase contracts contingent on the use of domestically-produced equipment. The WTO actions could result in the elimination of the domestic content requirements that favor domestic producers, or possibly a dismantling of the FIT programs themselves.

The first of the WTO actions, brought by the European Union and Japan, challenges the domestic content requirements of an Ontario, Canada, FIT program (WT/ DS412 and WT/DS426). That program requires wind and solar energy producers to use a certain percentage of equipment sourced from Ontario to qualify for the high fixed-rate prices for electricity guaranteed under the FIT program. A WTO panel ruling issued on Dec. 19, 2012, condemned the domestic content requirement of Ontario's FIT program on the basis that it creates incentives to use domestic equipment and components over equipment produced by third-country suppliers (244 International Trade Daily, 12/20/12). The panel found the domestic content requirements violate both the General Agreement on Tariffs and Trade (GATT) and the WTO Agreement on Trade-Related Investment Measures (TRIMs). The panel rejected claims brought under the WTO Agreement on Subsidies and Countervailing Measures (SCM) essentially because the complainants failed to prove that the energy production facilities in Ontario received a subsidy benefit through the guaranteed prices for their electricity. One of the panel members wrote a dissenting opinion, rare in WTO dispute settlement proceedings, arguing that the challenged measures did in fact confer a 'benefit' because the generous pricing offered to the high-cost energy producers allowed them to enter the wholesale electricity market when that would not have been possible in the absence of the FIT program.

On Feb. 5, 2013, Canada appealed the panel's findings to the WTO Appellate Body, reportedly arguing that the panel failed to recognize that a government procurement exception to GATT Article III's domestic content limitation applied to the FIT program (25 International Trade Daily, 2/6/13). The EU and Japan may file counter-appeals with the Appellate Body, which must decide appeals within 90 days of requests.

The second FIT case, initiated by China in November 2012, challenges the domestic content requirements of EU and EU Member State FIT programs (WT/DS452) (214 International Trade Daily, 11/6/12). China specifically named Greece and Italy as two European countries with offending FIT programs. Although this dispute has only reached the consultation stage, China raised GATT and TRIMS claims similar to those upheld by the WTO panel in the Ontario FIT case discussed above. If the Ontario panel's findings are upheld on appeal, the EU may find it difficult to defend its own Member State FIT programs since they appear to contain domestic content requirements similar to those the EU itself challenged in the Canadian case. China has also raised a claim under the WTO SCM agreement and may seek to overcome the evidentiary problem in the Ontario case by showing how the guaranteed prices of the FIT programs do confer a benefit to the participating electricity producers in the EU Member States.

A third WTO solar-related domestic content case was initiated on Feb. 6, 2013, by the United States against India's national solar program (26 International Trade Daily, 2/7/13). In its formal consultation request, the United States challenges so-called 'forced localization requirements' under which India requires its solar energy producers to use Indian-manufactured solar cells and modules to participate in its national solar program, and subsidies offered to those developers that use domestic equipment instead of imports. Similar to the cases brought against Canada and the EU, the United States claims India's domestic content requirements and related subsidies violate the nondiscrimination provisions of GATT Article III, the TRIMS agreement, and the WTO SCM agreement. A fourth WTO case could affect the administration by the United States of its countervailing duty (antisubsidy) law in all cases involving non-market economy countries, including those targeting the renewable energy sector. In this action, China has challenged a 2012 U.S. law that allows countervailing duty cases against non-market economies. This WTO action by China follows a number of legal challenges to the application beginning in 2007 of the U.S. countervailing duty to China and Vietnam, countries deemed by the U.S. Commerce Department to be non-market economy countries for which special treatment under the antidumping law is required. The WTO agreed to establish a dispute settlement panel in mid-December 2012 and a panel ruling could come sometime in late 2013 (242 International Trade Daily, 12/18/12).

Domestic Trade Remedy Actions Under domestic trade remedy laws, China, the European Union, the United States, and India have actions pending that could result in additional duties at the border on imports of solar cells and modules alleged or (in the U.S. cases) already found to be subsidized and/or unfairly priced in countervailing duty (CVD) and antidumping (AD) investigations, respectively. The United States also has just concluded AD/CVD investigations on wind towers from China and Vietnam and, like the solar cells/modules cases, these investigations concluded with affirmative findings of dumping, subsidization, and resulting injury to the U.S. domestic industry.

The United States recently concluded AD/CVD investigations on imports of Chinese solar cells and modules.

The findings mean that importers into the United States of these products must now deposit AD/CVD duties ranging from 24 percent to more than 250 percent, depending on the Chinese producers/exporters. The CVD and AD duty orders imposing the additional duties on solar cells and modules will remain in place for a minimum of five years (216 International Trade Daily, 11/8/12). The Chinese and U.S. participants in the case are separately challenging different parts of the Commerce Department's determination through the U.S. court system (26 International Trade Daily, 2/7/13).

In January 2013, the United States concluded its AD/ CVD investigations on wind towers (the large steel bases for wind turbines) imported from China and Vietnam with findings of dumping, subsidization, and resulting injury to U.S. producers of wind towers. As with the U.S. cases on solar cells/modules, imports into the United States of wind towers from China and Vietnam will now be subject to AD/CVD duties. On Dec. 18, 2012, the Commerce Department released its final determinations finding that Chinese exporters sold wind towers in the United States at below fair value and received countervailable subsidies (243 International Trade Daily, 12/19/12). The dumping margins range from 44.99 percent to 70.63 percent. The subsidy rates range from 21.86 percent to 34.81 percent. The Commerce Department also found that Vietnamese exporters sold wind towers in the U.S. market at below fair value prices at margins between 51.50 percent and 58.49 percent. On Jan. 18, 2013, the International Trade Commission made a positive injury determination finding that the U.S. industry is threatened with material injury by reason of subsidized and less than fair value imports from China and imports of less than fair value from Vietnam. As a result, the Commerce Department has issued AD/CVD orders in this case (14 International Trade Daily, 1/22/13).

Chinese solar cells and modules are also the subject of European Union antidumping and countervailing subsidy investigations (173 International Trade Daily, 9/7/12); (217 International Trade Daily, 11/9/12). Members of the European Parliament have urged the European Commission to conclude the preliminary stage of both its antidumping and countervailing duty investigations against Chinese solar cells and modules earlier than the legal deadlines of June 2013 and August 2013, respectively. Members of the European Parliament have argued that the survival of the EU solar industry could be threatened by waiting until June and August.

Widely reported as retaliatory in response to the U.S. and EU actions, on Nov. 26, 2012, China announced it was initiating AD and CVD investigations on polysilicon, a key element in the production of solar cells, from the United States and from the European Union, as well as from South Korea (213 International Trade Daily, 11/5/12). The Chinese industry is seeking retroactive application of the duties in both cases.

In November 2012, India joined the solar sector trade wars by announcing the initiation of antidumping investigations against solar cells produced in or exported from China, Taiwan, Malaysia, and the United States (230 International Trade Daily, 11/30/12). The targeted third-country industries had until early January 2013 to respond with information and data showing they are not dumping low-priced solar cells into the Indian market and are not a reason for the Indian solar cell manufacturers' failure to capture a reasonable share of the domestic market. The cases could have investment implications for U.S. solar cell manufacturers that supply or have signed contracts to supply solar cells to Indian companies.

Implications for Renewable Energy Sector The series of legal actions discussed here reflect the broader competing interests of the industries involved as well as the interests of their governments in promoting and protecting their domestic businesses. The actions themselves pose immediate costs and burdens for those parties directly involved. The longer term implications raise more serious strategic considerations for the industries at issue. For the solar sector, particularly, these actions will likely prompt or at least contribute to 'winners' and 'losers' among the current array of companies involved globally. AD/CVD duties will increase the costs to importers and, ultimately, consumers in any country that imposes such import relief. With global economic pressures persisting, domestic employment concerns ever-present, and national resources at issue, governments certainly will continue to seek, directly and indirectly, to affect the markets for these industries. Accordingly, producers as well as investors, suppliers, and consumers are all well advised to monitor and, where appropriate, take an active role in these legal proceedings to protect their interests going forward.

Previously published by Bloomberg BNA

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

To print this article, all you need is to be registered on Mondaq.com.

Click to Login as an existing user or Register so you can print this article.

In association with
Related Video
Up-coming Events Search
Font Size:
Mondaq on Twitter
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).
Email Address
Company Name
Confirm Password
Mondaq Topics -- Select your Interests
 Law Performance
 Law Practice
 Media & IT
 Real Estate
 Wealth Mgt
Asia Pacific
European Union
Latin America
Middle East
United States
Worldwide Updates
Check to state you have read and
agree to our Terms and Conditions

Terms & Conditions and Privacy Statement

Mondaq.com (the Website) is owned and managed by Mondaq Ltd and as a user you are granted a non-exclusive, revocable license to access the Website under its terms and conditions of use. Your use of the Website constitutes your agreement to the following terms and conditions of use. Mondaq Ltd may terminate your use of the Website if you are in breach of these terms and conditions or if Mondaq Ltd decides to terminate your license of use for whatever reason.

Use of www.mondaq.com

You may use the Website but are required to register as a user if you wish to read the full text of the content and articles available (the Content). You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these terms & conditions or with the prior written consent of Mondaq Ltd. You may not use electronic or other means to extract details or information about Mondaq.com’s content, users or contributors in order to offer them any services or products which compete directly or indirectly with Mondaq Ltd’s services and products.


Mondaq Ltd and/or its respective suppliers make no representations about the suitability of the information contained in the documents and related graphics published on this server for any purpose. All such documents and related graphics are provided "as is" without warranty of any kind. Mondaq Ltd and/or its respective suppliers hereby disclaim all warranties and conditions with regard to this information, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. In no event shall Mondaq Ltd and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use or performance of information available from this server.

The documents and related graphics published on this server could include technical inaccuracies or typographical errors. Changes are periodically added to the information herein. Mondaq Ltd and/or its respective suppliers may make improvements and/or changes in the product(s) and/or the program(s) described herein at any time.


Mondaq Ltd requires you to register and provide information that personally identifies you, including what sort of information you are interested in, for three primary purposes:

  • To allow you to personalize the Mondaq websites you are visiting.
  • To enable features such as password reminder, newsletter alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our information providers who provide information free for your use.

Mondaq (and its affiliate sites) do not sell or provide your details to third parties other than information providers. The reason we provide our information providers with this information is so that they can measure the response their articles are receiving and provide you with information about their products and services.

If you do not want us to provide your name and email address you may opt out by clicking here .

If you do not wish to receive any future announcements of products and services offered by Mondaq by clicking here .

Information Collection and Use

We require site users to register with Mondaq (and its affiliate sites) to view the free information on the site. We also collect information from our users at several different points on the websites: this is so that we can customise the sites according to individual usage, provide 'session-aware' functionality, and ensure that content is acquired and developed appropriately. This gives us an overall picture of our user profiles, which in turn shows to our Editorial Contributors the type of person they are reaching by posting articles on Mondaq (and its affiliate sites) – meaning more free content for registered users.

We are only able to provide the material on the Mondaq (and its affiliate sites) site free to site visitors because we can pass on information about the pages that users are viewing and the personal information users provide to us (e.g. email addresses) to reputable contributing firms such as law firms who author those pages. We do not sell or rent information to anyone else other than the authors of those pages, who may change from time to time. Should you wish us not to disclose your details to any of these parties, please tick the box above or tick the box marked "Opt out of Registration Information Disclosure" on the Your Profile page. We and our author organisations may only contact you via email or other means if you allow us to do so. Users can opt out of contact when they register on the site, or send an email to unsubscribe@mondaq.com with “no disclosure” in the subject heading

Mondaq News Alerts

In order to receive Mondaq News Alerts, users have to complete a separate registration form. This is a personalised service where users choose regions and topics of interest and we send it only to those users who have requested it. Users can stop receiving these Alerts by going to the Mondaq News Alerts page and deselecting all interest areas. In the same way users can amend their personal preferences to add or remove subject areas.


A cookie is a small text file written to a user’s hard drive that contains an identifying user number. The cookies do not contain any personal information about users. We use the cookie so users do not have to log in every time they use the service and the cookie will automatically expire if you do not visit the Mondaq website (or its affiliate sites) for 12 months. We also use the cookie to personalise a user's experience of the site (for example to show information specific to a user's region). As the Mondaq sites are fully personalised and cookies are essential to its core technology the site will function unpredictably with browsers that do not support cookies - or where cookies are disabled (in these circumstances we advise you to attempt to locate the information you require elsewhere on the web). However if you are concerned about the presence of a Mondaq cookie on your machine you can also choose to expire the cookie immediately (remove it) by selecting the 'Log Off' menu option as the last thing you do when you use the site.

Some of our business partners may use cookies on our site (for example, advertisers). However, we have no access to or control over these cookies and we are not aware of any at present that do so.

Log Files

We use IP addresses to analyse trends, administer the site, track movement, and gather broad demographic information for aggregate use. IP addresses are not linked to personally identifiable information.


This web site contains links to other sites. Please be aware that Mondaq (or its affiliate sites) are not responsible for the privacy practices of such other sites. We encourage our users to be aware when they leave our site and to read the privacy statements of these third party sites. This privacy statement applies solely to information collected by this Web site.

Surveys & Contests

From time-to-time our site requests information from users via surveys or contests. Participation in these surveys or contests is completely voluntary and the user therefore has a choice whether or not to disclose any information requested. Information requested may include contact information (such as name and delivery address), and demographic information (such as postcode, age level). Contact information will be used to notify the winners and award prizes. Survey information will be used for purposes of monitoring or improving the functionality of the site.


If a user elects to use our referral service for informing a friend about our site, we ask them for the friend’s name and email address. Mondaq stores this information and may contact the friend to invite them to register with Mondaq, but they will not be contacted more than once. The friend may contact Mondaq to request the removal of this information from our database.


From time to time Mondaq may send you emails promoting Mondaq services including new services. You may opt out of receiving such emails by clicking below.

*** If you do not wish to receive any future announcements of services offered by Mondaq you may opt out by clicking here .


This website takes every reasonable precaution to protect our users’ information. When users submit sensitive information via the website, your information is protected using firewalls and other security technology. If you have any questions about the security at our website, you can send an email to webmaster@mondaq.com.

Correcting/Updating Personal Information

If a user’s personally identifiable information changes (such as postcode), or if a user no longer desires our service, we will endeavour to provide a way to correct, update or remove that user’s personal data provided to us. This can usually be done at the “Your Profile” page or by sending an email to EditorialAdvisor@mondaq.com.

Notification of Changes

If we decide to change our Terms & Conditions or Privacy Policy, we will post those changes on our site so our users are always aware of what information we collect, how we use it, and under what circumstances, if any, we disclose it. If at any point we decide to use personally identifiable information in a manner different from that stated at the time it was collected, we will notify users by way of an email. Users will have a choice as to whether or not we use their information in this different manner. We will use information in accordance with the privacy policy under which the information was collected.

How to contact Mondaq

You can contact us with comments or queries at enquiries@mondaq.com.

If for some reason you believe Mondaq Ltd. has not adhered to these principles, please notify us by e-mail at problems@mondaq.com and we will use commercially reasonable efforts to determine and correct the problem promptly.