U.S. Energy Secretary Steven Chu said there's been "explosive" growth in the international solar energy market.
"American companies are helping to lead this dramatic progress, driving lower costs and introducing new, better performing technologies into the marketplace," he said in a statement.
The Energy Department said a $2.6 million investment would fund research programs that help advance solar energy performance and decrease associated costs.
Critics of U.S. President Barack Obama's renewable energy initiatives say the effort to reckless. Leaders in the House of Representatives have taken issue with a $535 million federal loan guarantee offered to solar panel company Solyndra, which filed for bankruptcy protection in 2010.
U.S. and European governments had backed subsidies for solar panels made in China to meet renewable energy benchmarks.
The sovereign debt crisis in Europe and recent tariffs imposed on Chinese panels, however, has hurt the industry in China, The Daily Telegraph newspaper reports. The newspaper reports most of the major Chinese solar panel manufacturers have reported billions of dollars of losses for the year.
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