First Solar is getting closer to securing loan guarantees for three solar panel plants that would add 1,300 megawatts of power worth of clean energy to the United States — a critical step in shoring up the potentially threatened American solar panel manufacturing industry.

The U.S. government is still flexing loan guarantees as a way to promote renewable energy research stateside — which faces the constant threat of being out-produced and out-gunned by foreign solar panel manufacturers. SunTech Power, a Chinese solar panel manufacturer, for example already has a massive presence in the United States and accounts for around 28 percent of all new residential home solar panels installed, said Ed Fenster, chief executive of SunRun, a company that leases out and handles maintenance for residential solar panels.

First Solar became the last major U.S.-based independent solar panel manufacturer after French oil company Total bought a majority stake in SunPower. But it also struggled to grow in its most recent operating quarter, and the company had a lukewarm outlook for the remainder of the year. It’s essentially the last major player on the solar panel manufacturing stage — and potentially one of the last holdouts before foreign solar panel manufacturers gain control over the U.S. market, which generates a lot of demand for renewable energy like solar power.

A loan guarantee from the Department of Energy helps companies like First Solar attract buyers and investors for new renewable energy projects. Basically it means the government will foot the bill if the project does not take off or is unable to get some kind of return for the investors. It’s one of the ways the U.S. government is promoting renewable energy sources. Other countries like Germany offer feed-in tariffs, which means the government sets the rate for each kilowatt-hour produced and utilities purchase the power at premium rates. Germany’s solar power market has exploded as a result.

“The U.S. is certainly funding companies within its borders with different technologies that are less bankable to date,” said Matt Feinstein, an analyst with clean technology research firm Lux Research. “Everybody’s doing something different, it’s kind of tough to say which is an advantage — but you can look at Germany and say obviously they’re doing it right.”

It isn’t clear whether the loan guarantee program run by the U.S. government is enough to keep up with foreign competitors. China is already the largest investor in clean technology, according to a report by Pew. Investors in China dropped $54.4 billion into clean technology ventures in 2010, while the United States only invested $34 billion into clean technology ventures. There’s also still an enormous amount of room to improve the ways solar panels capture sunlight and convert it to electricity, said Dallas Kachan, managing partner of Kachan & Co., a cleantech analysis and consulting firm.

First Solar was the first company to bring the cost of solar power down below $1 per watt. That’s a critical threshold that proved to regulators, lawmakers and consumers everywhere that renewable energy can scale. And First Solar still produces some of the cheapest solar panels in the world. But it isn’t clear whether loan guarantees and funding will be enough to ensure U.S. solar panel companies like First Solar can effectively compete with international players because local and state regulations are usually mercilessly complicated and can get in the way of creating renewable energy sources, Feinstein said.

“Many installers and project developers cite the numerous regulatory and electrical codes – local, state, and national – that projects must meet, in addition to utility requirements, for the inflated cost of solar systems relative to equipment costs and margins alone,” Feinstein said. “Though many agree with SunRun’s findings that creating a more uniform, sensible structure would bring down these ‘soft costs,’ few among them are optimistic that it will actually happen.”

First Solar also announced that one of the projects that might be eligible for a Department of Energy loan guarantee, its 550 megawatt Topaz Solar Farm, was approved by the San Luis Obispo County Planning Commission.