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An Oregon company is intensifying its search for space to accommodate Chinese solar manufacturers eager to avoid looming federal tariffs.

Eugene-based Grape Solar, a large importer of solar panels, is actively seeking Eugene-area commercial buildings with approximately 100,000 square feet of vacant space able to suit manufacturing. Ocean Yuan, president of , said he has visited the former Shorewood Packaging facility in Springfield several times and it could be a 鈥減erfect fit.鈥�

鈥淭he process was very slow until a couple of weeks ago when I was in China talking to partners,鈥� he said. 鈥淣ow there’s a sense of urgency.鈥�

Yuan declined to identify any of the Chinese partners, but said he will host several delegations in December. He is hoping that Grape Solar will begin performing final assembly of solar models in the first quarter of 2012.

Grape Solar has grown its business largely by importing Chinese and other foreign-made panels, packaging them into kits and then reselling them in the U.S. Although Yuan has had plans to begin manufacturing for some time, the sense of urgency is emerging from the federal investigation of a trade complaint led by Hillsboro-based SolarWorld Industries America, a subsidiary of SolarWorld of Germany.

SolarWorld and six other American manufacturers accused Chinese counterparts of receiving illegal government subsidies and dumping their products in the United States below cost.

If the Commerce Department were to side with U.S. manufacturers, tariffs would be levied on Chinese-made solar cells and solar panels, and the high import duties would make previously cheap products suddenly cost prohibitive, Yuan said.

In response, some Chinese solar panel manufacturers are redesigning their supply chains. The most economical plan for the companies now, according to Yuan, is to continue making wafers in China, shipping them to Taiwan or South Korea for conversion into solar cells and then possibly performing final assembly in the U.S. 鈥� potentially in Oregon.

鈥淭hey have money in place and just want me to organize teams and help them out in setting it up in Oregon,鈥� Yuan said.

Ben Santarris, spokesman for SolarWorld, said the manufacturing competition is welcome, as long as it’s legal.

鈥淭he difference in setting up production in this country is that we have to obey and enforce consistent environmental regulations and follow transparent standards of business and production,鈥� he said. 鈥淗ere, we have to honor the society’s labor rights and civil rights.鈥�

SolarWorld is likely to win the trade case against Chinese manufacturers, in part because the World Trade Organization considers China a nonmarket economy. That allows other countries to use special, advantageous rules in anti-dumping cases.

鈥淐hina is definitely going to retaliate,鈥� Yuan said.

According to several reports this week, a Chinese solar industry association is now weighing whether to file an anti-dumping case against U.S.-based producers of solar products. The group alleges that the U.S. is dumping exports of subsidized polysilicon into the Chinese market.

鈥淯nfortunately, our worst fears are becoming a reality,鈥� said Jigar Shah, co-founder of the Coalition for Affordable Solar Energy and founder of SunEdison, in a written response to China’s potential retaliation. 鈥淭ens of thousands of jobs are at stake, and for what? Who benefits?鈥�

Each week, more companies and trade groups throughout the solar supply chain are taking sides either with the SolarWorld-led Coalition for American Solar Manufacturing or CASE, which was formed in opposition.

Semiconductor Equipment and Materials International (SEMI), the trade association serving the manufacturing supply chain for the micro- and nano-electronics industries, last week announced its opposition to SolarWorld’s trade petition.

The group argues that many solar companies throughout the supply chain are dependent on exports, and the eruption of a trade war could negatively impact many U.S. exporters of solar products.

According to GTM Research and the U.S. Solar Energy Industry Association, American companies in 2010 exported $873 million of polysilicon and nearly $1 billion of manufacturing equipment to China, and imported $4 million of polysilicon and $93 million of manufacturing equipment.

鈥淚n the end, SolarWorld may win the lawsuit, which is the battle,鈥� Yuan said. 鈥淏ut the American solar industry will lose the war against China.鈥�