Sens. Charles Schumer (D-NY) and Sherrod Brown (D-O) have introduced legislation requiring certain levels of domestic content for solar panels in order to qualify for residential and business tax credits.

In order for homeowners and businesses to deduct 30% of the cost of solar panel installation, the new legislation would require that 70 percent of the parts of a solar panel be American-made. If the solar panel's final assembly was undertaken in the U.S., the domestic content requirement would be set at 50 percent.

According to CQ's Geoffrey Koss, the bill is intended to "address a flood of inexpensive Chinese panel imports in recent years, a phenomenon that has fueled a solar boom by lowering costs but one that has come at the expense of some U.S. manufacturers."

Sen. Schumer said the measure would help struggling U.S. manufacturers compete against Chinese firms: "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."

In December, a group of 59 Senators and Members of Congress urged President Obama to investigate allegations that Chinese firms are dumping subsidized solar panels in the U.S. at below fair-market value.

The group, which included Sen. Ron Wyden (D-OR) and Rep. Edward Markey (D-MA), sent a letter to the president stating that imports of Chinese solar products have "surged more than 350% from 2008 to 2010."  At the same time, the U.S. solar industry has "lost thousands of jobs, and at least seven companies have been forced to close or downsize."

More recently, the Commerce Department imposed import duties on Chinese-made solar cells.  Several U.S. manufacturers of solar panels had filed dumping charges against Chinese firms to offset illegal subsidies by the Chinese government. And the United Steelworkers (USW) had previously filed a section 301 trade case against China alleging that dumping and subsidies in the clean energy sector were adversely affecting U.S. manufacturers of renewable energy technology and equipment.

The Alliance for American Manufacturing (AAM) commends Senators Schumer and Brown for their forward-thinking legislation to reward domestic content when U.S. consumers seek tax credits for their purchases of solar panels. 

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