(MENAFN - The Conversation) The U.S. solar industry is nervously awaiting President Donald Trump's decision whether to impose punitive duties on and related equipment or even restrict some of those imports altogether. It could come any day between now and .

This is the final stage of a process that began when two U.S. subsidiaries of foreign solar panel makers filed a rarely used kind of with the International Trade Commission. The independent U.S. agency has a course of action officially intended to protect domestic manufacturers from unfair competition.

But far from protecting U.S. interests, the tariffs would stifle the current solar boom, destroying American jobs and dragging down clean energy innovation. As economists who research policies that can foster a , we argue the government should instead create targeted subsidies that support innovation and lower costs across the supply chain. This approach would do a better job of helping the U.S. industry fend off foreign competition without harming the industry itself.

A booming industry

The U.S. solar industry has enjoyed unprecedented growth in recent years, thanks to the rapidly declining cost to install solar systems and for homeowners, businesses and utilities that have expanded demand but are being . Prices have plunged to roughly US$1.50 per watt from around $6 in 2010 due to both that made it less expensive to make panels anywhere and .

In 2016, of U.S. solar installations used foreign-produced panels, also known as modules, primarily from China.

The in solar panel costs has been driven by in and elsewhere intended to expand domestic manufacturing of these products.

The problem is not unique. Other countries dependent on cheap solar imports, including Germany and Canada, are also grappling with how to sustain the solar boom while their own domestic manufacturers from unfair foreign competition.

The trade commission sent Trump its recommendations on Nov. 13, giving him to accept or reject its guidance. Later, U.S. Trade Representative asked the agency to draft a 'supplemental' report, effectively extending the president's deadline for setting the tariffs to Jan. 26.

The request, observers surmise, could signal that the administration is concerned about the this case's potential to spiral into a broader with China and other major U.S. trading partners.

Solar job growth

Solar job growth took off in 2010. By 2016, worked in the industry, up from fewer than 95,000 seven years earlier.

An uninterrupted solar boom would create even more jobs. The number of solar panel installers, for example, would more than double from within 10 years at the current pace of growth, which would make it the fastest-growing profession, according to the Bureau of Labor Statistics. Another renewable energy mainstay, , came in a close second.

Imposing tariffs on imported panels would cloud that outlook, largely because accounts for while installation amounts to more than half of them, according to the Solar Foundation's annual census. If panels get more expensive, the cost to go solar will rise and demand will fall – along with the impetus to employ so many installers.

The Solar Energy Industries Association, a trade group that represents many companies in the industry and opposes the duties, that imposing them could double solar prices and .

Smarter subsidies

Despite the robust growth in wind and solar employment and its official support for an ' energy policy that combines fossil fuels, nuclear power, biofuels and renewable energy alternatives like wind and solar, the Trump administration has sought to slash support for alternative energy through the .

We agree that the government should encourage solar panel manufacturing within the nation's borders. But there are better ways to support this important priority than by raising prices on imported equipment through punitive tariffs.

in solar panel manufacturing – apart from low wages – is driven by scale and supply-chain development, spurred by cost inducements like low-interest loans, technology development assistance and cheap land. Other newly industrialized countries like have followed China's lead by fostering their own solar manufacturing bases with targeted subsidies.

We believe the U.S. should follow suit. In addition to directing subsidies to reduce the costs of the , the government should also increase subsidies for private research and development for green innovation. Currently, financing for private solar R & D lags far behind levels seen in China and the European Union.

These subsidies could be the tariffs the government is already collecting on solar panels imported from China and elsewhere.

If the U.S. government deems that additional restrictions are required, then it makes sense to follow a to freeze solar panel imports at 2016 market share levels. The government should then auction off the rights to import foreign solar panels to U.S. installers.

The government could spend the proceeds from these auctioned import licenses on domestic innovation and other efforts to cut supply chain costs for U.S. manufacturers of solar panels and related equipment.

While World Trade Organization rules limit the use of that explicitly promote a country's exports in global markets, the ones we are proposing would likely be WTO-compliant.

This is because their aim is to make the U.S. solar industry more competitive within the domestic market, given the government's earlier findings that cheap imported panels are – sold too cheaply – here.

Why make an exception

Like most economists, we believe that except in special circumstances. Here are three reasons why this industry is an exception.

First, when one nation subsidizes solar panel production and exports those panels, it makes it cheaper to go solar in other countries, effectively cutting the cost of implementing climate policies abroad.

Second, when solar energy replaces fossil fuels in one place, the declining carbon emissions benefit people around the globe. Climate change, after all, affects the entire world.

Third, made in any one economy eventually add to the global knowledge base. Improving solar technology will ultimately benefit the entire industry worldwide.

The proposed tariffs the Trump administration is considering will yield none of these benefits. In fact, they could instigate a trade war over clean energy products with our trading partners globally.

That is why we believe that the smarter subsidies we are proposing are a better way to sustain the U.S. solar industry and protect jobs.

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