By Erin Ailworth 

A fight is brewing over possible trade protections for U.S. solar equipment and it is uniting disparate groups, including green energy advocates and conservative free-trade policy organizations.

The U.S. International Trade Commission this week will hear initial arguments, for and against, a petition filed by bankrupt solar panel-maker Suniva Inc. to levy a 40-cent per watt tariff on imported solar cells, the piece of equipment that converts sunlight into electricity. The company has also asked the ITC for a minimum price of 78 cents a watt, including the 40-cent tariff, on solar panels made by foreign manufacturers.

The ITC will make a final recommendation to the Trump administration by November.

Without that help, "we will be extinct," said Matt Card, Suniva's executive vice president of commercial operations. "I would like nothing more than to compete on a level playing field."

A glut of low-cost solar panels -- mainly manufactured in Asia -- have pushed prices down in recent years. The phenomenon has hurt Suniva, which filed for chapter 11 protection in April and closed two manufacturing facilities in Michigan and Georgia. But low-cost Asian imports have been a boon for U.S. solar installers, helping spur the adoption of rooftop solar panels, according to the trade group, the Solar Energy Industries Association, or SEIA.

A bipartisan group of 16 senators and 53 congressmen on Friday sent letters to the ITC urging it reject any new tariffs. "Increasing costs will stop solar growth dead in its tracks," the Senate letter said.

Suniva and its co-petitioner, SolarWorld Americas Inc., say that the tariff would boost domestic manufacturers and force overseas competitors to relocate plants to the U.S., potentially creating more than 100,000 new jobs across the industry.

"Unless we want to give away renewable energy to China, now is the time to take a stand," said Tim Brightbill, a lawyer representing SolarWorld.

By SEIA's estimate, taxing imported solar cells would result in more expensive solar equipment, thereby hurting demand for renewable energy and causing the sector to shed 88,000 jobs nationwide -- roughly a third of the current U.S. solar industry workforce.

"We think it is too blunt an instrument to use, especially in this case, " said Abigail Ross Hopper, chief executive of SEIA.

The American Legislative Exchange Council, which advocates for free markets, and other conservative policy groups, including the Heritage Foundation, are supporting the coalition's efforts to thwart a new tariff.

"The government should not be expected to bail out a few companies that just couldn't compete," said Sarah Hunt, director of the Center for Innovation and Technology at ALEC.

Suniva, which is majority owned by a company based in Hong Kong, and SolarWorld, whose German parent filed for insolvency earlier this year, both blame their financial troubles on Asian manufacturers dumping cheap solar panels into the market. A report issued earlier this month by staff at the International Trade Commission said nearly 30 U.S. solar production facilities have been shuttered since 2012.

In the last five years, the total cost to install solar systems has fallen nearly 70%, even before federal subsidies are factored in, according to SEIA.

Home solar installations have taken off in states from California to Massachusetts, with 7.4 gigawatts of residential solar capacity in the U.S. in 2016, more than double the capacity that existed in 2014, federal data show.

Utility companies, cities and big corporate users have also started to ramp up efforts to build large-scale solar farms. In 2016, 72% of solar capacity installed in the U.S. was utility-scale, according to SEIA. Those projects would suffer the most from a new tariff on foreign-made solar cells due to their thin profit margins, said Hugh Bromley, an analyst with Bloomberg New Energy Finance.

Write to Erin Ailworth at Erin.Ailworth@wsj.com

(END) Dow Jones Newswires

August 13, 2017 09:14 ET (13:14 GMT)