The European Commission on Thursday launched an anti-dumping probe against Chinese solar panel makers, in what is the biggest such complaint filed in the bloc in terms of import value.
The investigation was opened after industry association EU Pro Sun complained that Chinese solar panels and their key components have been entering the European market at prices below market value.
"In terms of import value affected, this is the most significant anti-dumping complaint the European Commission has received so far: in 2011, China exported solar panels and their key components worth around 21 billion euros ($26.5 billion) to the EU," the commission said in a statement.
China is the world's biggest solar panel maker with about 65 percent of global production. And about eight out of 10 of the Chinese panels go to the European Union.
The trade spat was raised during a recent visit by German Chancellor Angela Merkel to Beijing, when she urged a resolution of the dispute through dialogue rather than trade restrictions.
"Protectionism cannot be the answer for certain difficulties, we have to try to solve existing problems by the way of talks, problems we have in the field of solar energy for instance," she told reporters on August 30.
"We should endeavour to do so because there is still time and we will discuss with our colleagues in the European Union that we should give it a try."
Chinese solar companies as well as the government have denied the dumping accusation and have warned that an EU investigation into the case would risk undermining overall trade relations.
The probe would take 15 months, but Brussels can impose provisional punitive tariffs on Chinese products within nine months if there is sufficient prima facie evidence of dumping.