US set to give final decision on Chinese solar panel duties

* Tariffs have not slowed dramatic decline in solar panel prices

* US Commerce decision unlikely to stray far from preliminary ruling

* Solar panel makers have also filed action in Europe against Chinese manufacturers

By Doug Palmer and Nichola Groom

WASHINGTON/LOS ANGELES, Oct 8 (Reuters) - The U.S. Commerce Department on Wednesday will announce final duties on billions of dollars of solar panels from China in a high-profile case that has raised fears of further damage to an already fragile industry.

The department set combined preliminary duties of roughly 35 percent earlier this year on most Chinese solar panels to offset what it said were unfair prices and government subsidies.

The case was brought by a group of U.S. producers led by SolarWorld Americas , whose German parent has also filed action in Europe against Chinese solar panel imports.

So far, the tariffs have not slowed a dramatic decline in prices for solar panels. Globally, prices are down 30 percent this year alone due to a massive glut of panels. The rapid expansion of solar panel manufacturing in China in recent years is largely to blame for the massive oversupply, which has erased profits for makers of solar products and sent share prices in the industry into a tailspin.

One analyst said he does not expect Wednesday's ruling to be a game-changer for Chinese panel manufacturers or their investors.

"The market will be surprised if the Commerce Department changes significantly from its preliminary ruling," said Brigantine Advisors solar analyst Ramesh Misra.

"Does it have much of an impact on the Chinese companies at this point? Most of them are already in mitigation mode trying to figure out ways around it."

China has warned that the U.S. and European Union cases both could damage trade ties and cripple healthy development of the global solar and clean energy sector.

It has already struck back by launching an investigation into imports of solar-grade polysilicon from both the United States and South Korea.

The Commerce Department on Wednesday will either raise or lower its separate anti-dumping and countervailing duty calculations on the Chinese panels, based on any new information it has found in its investigation.

It will also revisit a decision to exclude panels made from non-Chinese solar cells from the duties. A number of U.S. lawmakers have criticized that ruling, saying it would simply encourage Chinese manufacturers to move solar cell production outside China to circumvent U.S. duties on panels. Solar cells are assembled to make solar panels.

The last stage of the case will come in early November, when a separate agency, the U.S. International Trade Commission, will vote on whether to approve the duties or not.

Last year, the panel allowed the case to go forward by voting 6-0 that there was reasonable indication that U.S. producers had been materially harmed by the imports.

For duties to be denied, four commissioners would have to vote in November that U.S. producers have not been materially harmed or threatened by the Chinese-made solar products.

In the first round, Suntech Power Holdings , Trina Solar and 59 other Chinese solar companies were hit with preliminary anti-dumping duties of slightly more than 31 percent. "All other" Chinese solar companies got a preliminary anti-dumping duty of about 250 percent.

Suntech and Trina also received preliminary countervailing duties of 2.90 percent and 4.73 percent, respectively. All other Chinese solar companies were also hit with a preliminary countervailing duty rate of 3.61 percent.

SolarWorld Americas President Gordon Brinser said last week the preliminary duties were too low, while both Chinese manufacturers and U.S. companies that install solar panels argue they will hurt the sector by raising costs.

On the bright side, the tariffs could force some Chinese production capacity to shut down.

"That might drive consolidation in the Chinese market and that would be a huge net positive," Brigantine's Misra said.

(Reporting by Doug Palmer and Nichola Groom; Editing by Patricia Kranz, Gary Hill)

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