The European Union will imposed retroactive duties on Made-in-China solar panels and Chinese firms that export the PVs if proven that the panels were sold below production cost because of subsidies.

Member-states also approved on Wednesday the European Commission plan to require the registration by owners of all solar panels exported from China in a bid by the bloc to have more oversight over the $27-billion import market.

Because of the size of the market, politicians warned that it could escalate tensions between the EU and China which is the bloc's second-largest trade partner, and possibly lead to a trade war.

The EU probe is the result of a complaint by European solar panel manufacturing companies that they are suffering financial losses because of the dumping of cheap PVs made in China. In 2011, about 21 billion euro worth of solar panels and components were exported to Europe.

However, solar installers in the bloc warned that up to 242,000 jobs are at risk over three years if the EU would imposed a 60 per cent duty on Chinese PVs. Germany-based Prognos, an economic research organisation, estimated that 115,000 jobs on the first year of implementation would be lost if the duties would be 20 per cent but it could rise to 193,700 jobs if the duty would be at 60 per cent.

Prices of the PVs made in China are up to 45 per cent lower compared to those made by European companies