Small steps taken to avert global solar panel price war

New York Times : The Obama administration and the European Union have each decided to negotiate settlements involving China’s $30-billion-a-year exports of solar panels. The Financial Times reports that the EU in particular has faced pressure from the German government, because Chinese premier Li Keqiang will visit Germany next week. The proposed settlement, which might take months to negotiate, splits the globe into regional markets and eliminates steep import duties on Chinese solar panels. The price of panels will rise naturally: Quotas will be introduced which in turn, might make solar power less competitive with fossil fuels. In the past four years, a glut of solar panels from China has caused prices to collapse globally by 75% and has driven some US companies like Solyndra into bankruptcy. The cheap prices were fueled by massive subsidies from the Chinese local, state, and national governments. Under US and EU laws, the domestic solar panel industry must agree to the terms before the settlement is finalized. However, it is not certain that China will accept the proposal, and if no settlement is signed by 5 December, then EU tariffs against Chinese solar panels automatically go into effect.