* SolarWorld mulling steps in Europe after U.S. complaint - CEO
* Germany's BSW says price plunge caused by uneven conditions
* Beijing says has been in strict compliance with WTO commitments
By Christoph Steitz and Leonora Walet
FRANKFURT/HONG KONG, Oct 20 Chinese solar companies could soon find themselves bereft of some of their biggest foreign markets as Western manufacturers intensify a solar trade war and seek stiff anti-dumping duties on low-cost Chinese products.
German group SolarWorld said on Thursday it was working on steps to curb alleged price dumping by Chinese rivals in Europe .
This comes less than a day after its U.S. unit led a group of seven U.S. solar companies in urging the U.S government to slap anti-dumping duties on Chinese-made solar energy products.
They charged that Chinese producers can aggressively undercut U.S. prices because they receive cash grants and other subsidies in China, destroying thousands of American jobs.
"If the U.S. takes action, it could have a serious impact on Chinese solar players," said Min Li, head of alternative energy at Yuanta Securities (Hong Kong) in response to the filed complaint.
Europe is the world's largest solar market, accounting for about 80 percent of global photovoltaic (PV) installations, while the U.S. accounted for 5.3 percent.
Solar companies have been betting the United States may become the world's largest market in the next few years, replacing Germany in top spot as Berlin trims subsidies.
Western solar companies have been at odds with their Chinese counterparts for years, alleging they receive lavish credit lines to offer modules at cheaper prices, while European players struggle to refinance.
NO FAIR COMPETITION
SolarWorld Chief Executive Frank Asbeck last month said there was no fair competition in the solar industry, adding that the Chinese government had made credit guarantees of more than 21 billion euros ($29 billion) to its solar companies in 2011 alone.
Chinese solar companies such as Suntech , Yingli and JA Solar have in the past secured generous loans via the China Development Bank (CDB).
Beijing says it has been fair in its dealings with its trade partners and adheres to its commitments with the World Trade Organization (WTO).
"Since China's accession into the WTO, (we have) been in strict compliance with the commitments under the WTO," said Foreign Ministry spokeswoman Jiang Yu.
Carsten Koernig, managing director of the German solar industry association BSW, said the massive price declines in the solar industry were "not a result of innovation but of uneven political conditions".
Chinese solar companies have grown significantly in recent years, attracted by solar subsidies in Germany, which have been the industry's highest for a long time, and eating away market share from their Western peers.
But a steep decline in demand from Europe, which accounts for more than three-fourths of Chinese solar module makers' revenues, following subsidy cuts have made these companies more reliant on the United States, and any escalation in trade tensions could pose a major threat to them.
"(The complaint) is closely related to the domestic political and economic situation. There are some social conflicts and an economic crisis in the United States, so they need to seek a way out and find scapegoats," said Meng Xiangan, Vice chairman of China Renewable Energy Society.