Escalating the solar trade war with China would cost the EU billions in lost jobs and growth in the burgeoning renewable sector, says a report.

 

The solar photovoltaics (PV) industry has taken off over the last decade, with more solar PV capacity installed in the EU in 2010 than new wind power. Cheap solar cells imported from China have helped spur that growth by bringing costs down.

 

However, last year the EU Commission accused China of dumping cheap solar products on the market, damaging Europe's own manufacturing industry, and talked of imposing trade duties to stop the imports.

 

If this action goes ahead, it would cause more harm than good, says a report from the German think-tank Prognos, commissioned by The Alliance for Affordable Solar Energy (AFASE) – a coalition of over 160 companies in the European PV industry.

 

The report predicts production of solar products within the EU may increase but that overall demand would fall because of the extra cost of solar products. This would hit the wider solar industry as a whole within Europe, as well as other export industries supplying China.

 

It predicts job losses of between 170,000 and 240,000 within the EU and a total economic loss of between US$24-36 billion over three years. Germany is expected to be worst hit, followed by Italy, Spain and the UK.

 

A spokesperson for the EU Commission told the New York Times it was still considering whether to take action against Chinese solar imports but that the "overall economic interests of the EU" would be taken into account.