An ongoing trade fight over which nation will dominate the emerging solar power industry took a new turn Tuesday when U.S. Sens. Sherrod Brown, D-Ohio, and Charles Schumer, D-N.Y., announced a proposal to prohibit Chinese products from taking advantage of U.S. tax credits.

The bill would bar Chinese-made solar panels from qualifying for a 30 percent tax credit for buying and installing solar panels. The IRS allows tax breaks for solar panels regardless of where they are made.

Brown and Schumer said new solar wattage installed in the U.S. has grown more than 70 percent per year since 2008, “yet the vast majority of those solar panels have been made in China and have undercut U.S. producers and jobs.”

Brown cited Department of Energy Information Administration figures showing 57 percent of all solar photovoltaic cells sold in the United States in 2009 were imported. China produced half the world’s solar panels in 2010; 95 percent were exported. 

The proposal would narrow tax credit eligibility by requiring that 70 percent of a solar panel be American-made — or, if the final manufacture point is in the U.S., then 50 percent of the parts must be U.S.-made.

But the Coalition for Affordable Solar Energy, a group of solar panel suppliers, said that “free trade and industry competition are critical to making solar electricity affordable for everyone.”

“It’s important to remember that no nation or industry “wins” when trade disputes escalate – and in this case, we are concerned about serious unintended consequences such as local job loss and retaliatory tariffs,” said Robert D. Hansen, president and CEO of Dow Corning Corp.

Thursday the U.S. Commerce Department is expected to announce whether to impose more tariffs on Chinese solar panels. Earlier this year, the department concluded the Chinese government is improperly subsidizing solar manufacturers and imposed duties ranging from 2.9 percent to 4.73 percent on Chinese-made solar panels and cells. Ohio’s solar manufacturing industry was estimated to employ 1,500 in 2011.