THE Coalition has called for an urgent investigation into the potential dumping of cut-price Chinese solar panels into Australia, which threatens to undermine a fledgling domestic solar power industry.

Federal opposition environment spokesman Greg Hunt wrote to counterpart Peter Garrett after it emerged China's leading solar cell producer, Suntech, had admitted selling in the US at below cost to establish market share. "Australia may be or become subject to the dumping of solar panels at below the normal cost of production in our marketplace," Mr Hunt said in a letter to the Environment Minister.

Solar panels imported from China have fallen in price from $1600 to $1050 in the past few months, forcing down the cost of Australian-made products as well. Mr Hunt queried whether this was in breach of World Trade Organisation anti-dumping rules.

"The dumping of artificially cheap solar panels into Australia would place our own solar production industry at a clear disadvantage," he wrote.

"I understand that it may potentially breach national and international dumping laws and conventions."

Mr Hunt's warning comes as the first solar cell manufacturing project to gain federal government special help appears set to miss its deadline for setting up operations in Australia.

Spark Solar early this year was given major project facilitation status by Infrastructure Minister Anthony Albanese, which smooths development applications and clears red tape. The expectation was that a factory would be built by mid next year and Australian solar cells would be exported to Germany by the end of next year. But Chinese imports have slashed the retail price of solar panels, leading to a glut in Germany, and Spark Solar has not yet found a site to build its factory.

Spark Solar head Michelle McCain told The Weekend Australian yesterday the price of solar cells in Australia had been artificially high.

"There is an excellent case for investment in photovoltaic manufacturing in Australia," she said. "We can leverage the competitive advantage of workforce skills and specialist solar graduates from the Australian National University and the University of NSW to create a sustainable business. Sustainable price drops are part of the inevitable trend."

Canberra solar panel retailer and installer Phil May, the director of Solartec Renewables, said the concerns being expressed meant Mr Garrett should investigate the issue "as a matter or urgency". A spokesman for Mr Garrett declined to comment last night but government sources said the Environment Minister was not responsible for anti-dumping investigations.