Hawaii’s progress toward money-saving, job-creating, environmentally friendly solar energy will reach a crucial crossroads on Thursday when the U.S. Department of Commerce will decide whether to set steep tariffs on some solar cells and modules imported from China.

This ruling will respond to a complaint by SolarWorld, a German-owned company with one facility in Oregon, charging that China is "dumping" solar panels on the U.S. market. In a preliminary determination last month, the Commerce Department set low countervailing duties, or tariffs, on these imports.

Now numbering more than 5,000 companies with more than 100,000 employees, the U.S. solar industry has been expanding by 6.8 percent a year, adding some 7,000 jobs in 2011, while the entire economy had a growth rate of only 0.7 percent. During 2011, Hawaii ranked 11th in the nation in solar energy installations, according to the U.S. Solar Market Insight 2011 Year-in-Review Report. The industry already accounts for 15 percent of all construction spending in Hawaii and employs more than 2,000 people throughout the state.

With Hawaii’s companies and consumers paying the nation’s highest electricity costs, solar energy offers an economically and environmentally sustainable alternative. Because Hawaii is separated from North America by more than 2,500 miles of ocean, the state currently generates some 75 percent of its electricity from oil that is shipped at great cost from the mainland or from foreign countries. This reliance on oil, as well as other fossil fuels such as coal, sends Hawaii’s hard-earned money out-of-state while polluting the state’s natural environment.

Solar power keeps Hawaii’s energy dollars in the state, generating jobs, sales and tax revenues as well as clean electricity. According to a recent report by economist Thomas Loudat for the Blue Planet Foundation, every dollar in Hawaii’s commercial solar energy tax credit eventually generates almost $45 in additional sales for the state’s businesses and workers and more than $3 in new tax revenues.

But this progress will be put at risk if the Commerce Department sets high import duties on Chinese-made solar panels, such as the up to 250 percent tariffs sought by SolarWorld, whose business — silicon solar cell manufacturing —accounts for about 3 percent of all jobs in the U.S. solar industry. For the remaining 97 percent of the industry, as well as solar energy consumers, low prices for panels aren’t the problem, and protectionism isn’t the solution.

Because costs are falling, we have finally reached the point where, at current prices in many communities, utilities, businesses, developers and homeowners are selecting solar power as a source of safe, affordable and reliable energy. This year, as the use of solar energy continues to increase, the industry expects to develop almost $12 billion worth of projects and hire some 24,000 more workers.

But these gains in employment and the environment will be short-circuited if the Commerce Department approves steep tariffs, resulting in significantly higher prices. According to the economic consulting firm, the Brattle Group, steep tariffs on imported solar panels would result in the loss of up to 32,700 jobs related to the solar industry in 2012, 40,600 by 2013, and nearly 50,000 by 2014. Moreover, a trade war with China would hurt Hawaii, California, Washington, Oregon and other states whose economies and export industries look toward the Pacific Rim.

The United States has more consistent solar resources and lower interest rates than any other country. Without building trade walls, the U.S. is an ideal place to manufacture solar panels and install solar power to ease the transition to renewable sources of electricity.

The U.S. and China should reach an agreement that benefits both countries’ solar industries, instead of initiating a mutually destructive trade war.

To generate clean and affordable energy and good jobs, we need progress, not protectionism.