Both the United States and the European Union want to join consultations on a complaint by Japan to the World Trade Organization, saying they have a "substantial'' stake in the discussions.
"The United States has a substantial trade interest in these consultations,'' U.S. officials wrote to the WTO on Sept. 24.
"The United States is a major innovator of renewable energy and related technologies and is a primary source of Canadian imports of products used in the production of renewable energy, including solar and wind energy.''
The EU echoed those concerns in a Sept. 27 letter to the WTO, adding that it also has a "systemic interest in the correct implementation'' of international trade agreements.
At issue is Ontario's feed-in tariff program - or FIT - which set a fixed price for electricity generated by renewable energy projects, such as wind turbines and solar panels.
The lucrative payments range from 13.5 cents per kilowatt hour for wind power to 80.2 cents per kilowatt hour for small, rooftop-mounted solar projects.
But companies are required to have a certain percentage of their project costs come from Ontario goods and labour, which Japan argues violates Canada's international trade obligations.
For wind projects that generate more than 10 kilowatts, the made-in-Ontario requirement starts at 25 per cent and increases to 50 per cent by 2012. The requirements for large solar panel projects start at 50 per cent and increase to 60 per cent by 2011.
Japan, which made the complaint earlier this month, has asked for consultations with Canada - the first step in the dispute resolution process. If consultations fail, the complaint goes before a panel which will ultimately hand down a ruling.
The complaints are another blow to the Ontario Liberals, who tout their Green Energy Act as key to their plans to create jobs and reduce the province's dependence on dirty coal-fired power generation.
It has already signed a $7-billion deal with Korean giant Samsung to build wind and solar farms, along with four plants to manufacture components for green energy projects.
Ontario Energy Minister Brad Duguid said Friday he's confident the legislation is consistent with its trade obligations and won't damage the province's relationship with its trading partners.
"We have become if not the leader, one of the leading jurisdictions when it comes to attracting renewable energy and building a renewable energy economy,'' he said in an interview with The Canadian Press.
"So we're not surprised that it's attracting international attention. In fact, we've known for some time that we are seen as a world leader, and as such, it's going to get these kind of challenges from time to time.''
International Trade Minister Peter Van Loan has said the federal government will defend Ontario and its green energy policy by helping it prepare documents and argue the case if it comes before the WTO.
"The federal government, by definition, has to defend any trade action under the WTO brought against (Canada), including a province, or provincial action or policy,'' he said Sept. 14.
