This article is from the archive of our partner National Journal

Democratic Sens. Chuck Schumer of New York and Sherrod Brown of Ohio unveiled a proposal on Tuesday that would disqualify Chinese-made solar panels from a 30 percent solar-investment tax credit meant to incentivize the solar market.

"We can't trade our dependence on foreign oil for a dependence on Chinese-made solar panels," Brown said. "We went from a solar trade surplus with China to a solar trade deficit in a matter of years," he added, noting that the Chinese export subsidies create an unfair playing field for U.S. solar manufacturers.

In their plan, Brown and Schumer suggest modifying either the Energy Investment Credit or the Residential Energy Efficient Property Credit to include a domestic-content requirement requiring that 70 percent of the parts of the qualifying solar panel be made in the U.S. If the final panels were manufactured in the U.S., however, the requirement would be reduced to 50 percent of the parts being made in the U.S. to qualify for the tax incentives.

The proposal, Schumer and Brown said, would loosen China's grip on the solar market, which has grown as Chinese companies have taken in government subsidies, leading to plunging prices for wholesale solar panel makers in the United States.

"The federal government has to take China's stranglehold on the solar-power industry very seriously, and U.S. manufacturers must have every arrow in their quiver to fight back," Schumer said. "This hard-hitting plan will level the playing field for U.S. solar producers so that they can compete, create jobs, and become a global leader in this rapidly-growing industry."

The proposal comes just as the Commerce Department weighs a decision over China's solar trading practices. Specifically, Commerce is expected to issue preliminary determinations this week on whether Chinese solar manufacturers are illegally selling solar products below market price to capture the U.S. market.

In March, Commerce found that the Chinese government is illegally subsidizing solar-panel exports to the United States, announcing a first round of countervailing tariffs of up to 4.73 percent. Additional tariffs, which are expected to be higher for anti-dumping, could be applied on top of this first set of duties, depending on the decision from the Commerce, expected on Thursday.

Despite the push from the solar industry and lawmakers such as Brown and Schumer, some developers fear that these tariffs could raise prices for the solar market across the board. Members of the Coalition for Affordable Solar Energy, which represents a solid chunk of the American solar industry, spoke out against increasing tariffs on Tuesday.

"Tariffs are not in the best interest of American solar manufacturing, the American solar industry, or American solar consumers," Tore Torvund, CEO of REC Silicon, said in a statement.  "We are concerned about the increased likelihood that China will retaliate with their own unilateral tariffs on polysilicon exports from U.S. producers such as REC Silicon. No one benefits in a global solar trade war."

This article is from the archive of our partner National Journal.

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