Skip to main content

China Threatens Action Over California Renewables Program

Support Provided By
Kunming-Solar-8-21-12-thumb-600x399-34541

Rooftop solar in Kunming, China. | Photo: Matthijs Koster/Flickr/Creative Commons License

The People's Republic of China threatened this week to take legal action against the U.S. under World Trade Organization (WTO) rules on the grounds that several renewable energy programs in six states constitute prohibited subsidies. Though yesterday's announcement by the Chinese Ministry of Commerce does not specify which California program is raising China's ire, it's most likely California's Self-Generation Incentive Program (SGIP) the Ministry has in mind.

Administered by the California Public Utilities' Commission (CPUC), the Self-Generation Incentive Program (SGIP) is intended to encourage buildout of non-solar distributed generation capacity in the state. The CPUC says the decade-old program is responsible for the creation of 412 megawatts of generating capacity in more than 1,500 separate installations.

China's Ministry of Commerce labeled the SGIP as an illegal subsidy in a statement in a policy release in May. Among the SGIP's provisions is a 20% incentive bonus for projects that use materials made in California.

If China does bring the dispute to the World Trade Organization, the WTO could force a repeal of the SGIP's local buying preference.

The charge by China's Commerce Ministry is being made in the context of an escalating war of words between the U.S. and European Union on one hand, and China on the other, in the renewable energy trade sector. Each side has accused the other of illegally subsidizing its own domestic renewable energy industry, dumping products on the global market, and penalizing foreign companies contrary to the WTO agreement. The U.S. imposed a 31% tariff on Chinese solar panels, and bumped up import duties on the country's wind turbines last month.

May's policy statement by the Ministry of Commerce listed the other U.S. programs it viewed as improper subsidies as the Washington Funds Project to Encourage Renewable Fuel Production, the Wind Generation and Manufacturing Projects of Ohio, the State Energy Program of New Jersey, and the State Rebate Program of Massachusetts. The Ministry accused the programs of:

constituting prohibited subsidies as stated in Article 3 of the WTO Agreement on Subsidies and Countervailing Measures (SCM Agreement), violate provisions of Article 3 of SCM Agreement and Article 3 of the GATT 1994, distort normal international trade, and constitute trade barriers by "violating or failing to fulfill the obligations stated in the trade treaty or agreement signed or jointed agreed by the country (region) and China" as stated in Article 3 of the Rule of Investigation.

ReWire is dedicated to covering renewable energy in California. Keep in touch by liking us on Facebook, and help shape our editorial direction by taking this quick survey here.

Support Provided By
Read More
Gray industrial towers and stacks rise up from behind the pitched roofs of warehouse buildings against a gray-blue sky, with a row of yellow-gold barrels with black lids lined up in the foreground to the right of a portable toilet.

California Isn't on Track To Meet Its Climate Change Mandates. It's Not Even Close.

According to the annual California Green Innovation Index released by Next 10 last week, California is off track from meeting its climate goals for the year 2030, as well as reaching carbon neutrality by 2045.
A row of cows stands in individual cages along a line of light-colored enclosures, placed along a dirt path under a blue sky dotted with white puffy clouds.

A Battle Is Underway Over California’s Lucrative Dairy Biogas Market

California is considering changes to a program that has incentivized dairy biogas, to transform methane emissions into a source of natural gas. Neighbors are pushing for an end to the subsidies because of its impact on air quality and possible water pollution.
A Black woman with long, black brains wears a black Chicago Bulls windbreaker jacket with red and white stripes as she stands at the top of a short staircase in a housing complex and rests her left hand on the metal railing. She smiles slightly while looking directly at the camera.

Los Angeles County Is Testing AI's Ability To Prevent Homelessness

In order to prevent people from becoming homeless before it happens, Los Angeles County officials are using artificial intelligence (AI) technology to predict who in the county is most likely to lose their housing. They would then step in to help those people with their rent, utility bills, car payments and more so they don't become unhoused.