The cost of Chinese solar panels has been so cheap that Europe had been threatening a trade war over what it considered dumping. It appears, though, that cooler heads have prevailed, and the EU and China have agreed to a minimum price level for Chinese solar panels imported into Europe. The new restrictions will set a $0.75-per-watt minimum on the first 7 gigawatts of panels sold.
This is potentially a big deal for Chinese solar companies, as Europe is far and away the world's largest solar market. Trina Solar (NYSE:TSL) and Yingli Green Energy (NYSE:YGE) get 30% and 40% of their revenue from Europe, respectively. So these price penalties could eat into a very large chunk of these companies' revenue. Add that to the rapidly declining costs for the entire industry, and the financial straits for Chinese companies already, and the market for these companies doesn't appear too attractive. Tune in to the following video, where Fool.com contributor Tyler Crowe takes a look at what it could mean for solar investments both in China and the United States.