The Europe, which assembled 74% of the global solar parts in 2011, remains the most important solar panel market, but faces increasing encroachment from Chinese manufacturers

Suntech Power Holdings Co., Ltd. (STP), the world's largest producer of solar panels, issued an announcement Wednesday in which it rejected SolarWorld´s complaints filed with the European Commission (EC), complaining the Chinese company of dumping solar products in Europe.

"Suntech rejects SolarWorld´s allegations that it has received illegal subsidies and is dumping solar products in Europe and will cooperate fully with any investigation,” STP said in the announcement.

SolarWorld, the largest solar panels producer in Germany, filed a complaint with the European Commission earlier this week, alleging that the Chinese manufacturer has been dumping solar panels on the European market and that the Chinese government has been providing illegal subsidies to its solar-power manufacturing industry.

STP responded that the company is transparent with regards to cost of production and cost of capital and will continue to demonstrate its adherence to fair international trade practices.

The Western and the Chinese solar products manufacturers have long been tangled in disputes as the Chinese companies are leading the global market, offering cheaper products than their European and U.S. rivals who are struggling with financing.

Based on EPIA statistics, the Europe, which assembled 74% of the global solar parts in 2011, remains the most important solar panel market, but faces increasing encroachment from Chinese manufacturers.

However, Chinese solar manufacturers warned that no one will benefit from a trade war if Europe takes anti-dumping measures on Chinese exports since China remains the world’s largest solar parts producer, contributing 57% of the global solar parts output.

Last month, the U.S. Department of Commerce announced stiff anti-dumping tariffs of around 31 percent on crystalline silicon solar panels imported from China.

The EC will decide whether an investigation is needed 45 days after SolarWorld’s complaint.