WTO RULES FOR IMPORTED SUN

World Trade Organization Delivers Blow to Solar PV Domestic Content Proponents

Michael Barker, May 15, 2013 (SolarBuzz)

“…[T]he World Trade Organization (WTO) released its final ruling in the dispute concerning Ontario, Canada’s local content requirements (LCRs) for its internal FIT program…[T]his ruling ends a process that was initiated almost three years ago when Japan first filed a complaint – in September 2010 – alleging that Ontario’s LCRs violated trade agreements. It then took more than two years for a decision upholding the complaint…

“The ruling immediately affects the Canadian market…[L]ess than 50% of [the PV project application pipeline in Ontario of almost 1 GW] has actually received notice to proceed. This means that the Ontario market – which is almost wholly responsible for Canadian market demand – could become moribund within a few years as the PV project pipeline is exhausted and not renewed…[The] ruling could also have implications beyond Canada, as domestic content requirements (DCRs) exist…[in eight of the top 30 global markets] representing almost 60 GW of PV demand over the next five years.”

click to enlarge

“…[The ruling means] many of the content requirements in place will be found to be in violation of WTO rules. In fact, there are currently several cases very similar to the Ontario dispute already under investigation by the WTO; concerning countries such as India, Italy, and Greece.

“The current ruling against such policies may drive more complaints being filed…increasing the scope of the current global trade disputes. Also, many PV incentive programs are being implemented as a broad economic policy, intended to stimulate both upstream and downstream PV industry activity. If countries are forced to abandon the former part of this strategy, it is possible that they will also remove the latter, thus jeopardizing future demand…”

Tweet