The new solar PV program recently announced by Italy includes additional incentives for solar modules made in Europe, which is seen as a "protection" policy for European-made solar products to compete with the low cost modules from Asian firms enabled by low labor costs. But China makers reportedly are trying to stop Italy's new program, alleging unfair trade practices.

According to industry sources, rumors have been circulating the market that Chinese solar industry players are planning to lobby the China government to take this issue to the World Trade Organization (WTO). If this plea becomes successful, Italy's new incentive program might be stalled once more.

If Italy's new incentive program cannot be implemented by the time the current one ends, then the backlog problem will reappear in Europe, according to industry sources. Many contracts for solar installations reportedly have been halted temporarily due to the delayed solar incentive policies by the Italian government.

In fact, the "protection" policy may not be able to boost Italy's employment rate as most firms run their module production in the more cost-efficient Eastern Europe, the sources commented.

In comparison to the other solar products across the supply chain, module production is the most labor-intensive sector. Hence, the Chinese firms, with low labor costs, have been dominating this market.