Trump's Tariffs Inflict Damage on US Solar Industry

US industries are widely contending with the novel foreign trade policy landscape ushered in by President Donald Trump's "reciprocal tariffs," which apply to the majority of goods from most countries. These tariffs differ based on the country of origin, generally spanning from 10% to 50%, with specific goods and materials being exempted.

Trump's reciprocal tariffs are anticipated to drive up energy costs across various technology sectors, and the solar industry is no exception.

The solar industry is well - acquainted with tariffs on imported goods. In 2024, approximately 75% of solar cells and modules were imported, and according to data from the US International Trade Commission, the United States imported over $16.5 billion worth of solar modules and cells.

A significant portion of the global supply chain hails from China. Under the Section 301 designation, solar wafers, cells, and module imports from China are subject to a 50% tariff. Now, the reciprocal tariff rate adds an additional 34% to this total.

Chinese suppliers have largely shifted their supply chains to Vietnam, Thailand, Malaysia, and Cambodia to serve the US market and evade these hefty tariffs. These four nations account for over 80% of the US solar module supply.

However, these four Southeast Asian nations are currently under an antidumping and countervailing duty (AD/CVD) investigation. If found to be in violation of AD/CVD laws, they will face tariffs that historically range from 50% to 250%.

Moreover, these suppliers now also have to contend with reciprocal tariffs, which are imposed on top of AD/CVD duties. The rates are as follows: Vietnam (46%), Malaysia (26%), Thailand (36%), and Cambodia (49%).

In response to AD/CVD enforcement, solar suppliers have continued to relocate their factories, with a substantial amount of supply moving to Laos and Indonesia. But under Trump's reciprocal tariffs, goods shipped from these countries now face tariffs of 48% and 32%, respectively.

"This has some truly significant implications," stated Stefan Reisinger, a partner at Norton Rose Fulbright, in a recent podcast. "A great deal of capital was invested in building factories there. This policy targets some of the key producers."

Although the US has made progress in bringing solar module manufacturing back to domestic shores, domestic supply still falls far short of demand. The upstream manufacturing stages, including polysilicon refinement, wafer, and cell manufacturing, are severely undersupplied. Factory investments remain in limbo as the industry awaits the decision of the Republican - controlled Congress regarding the clean energy manufacturing tax credits established by the Biden - era Inflation Reduction Act.

Furthermore, Trump imposed a 25% tariff on steel and aluminum imports. Both materials are crucial components in the cost structure of a solar project, being used in panel frames as well as mounts and racking.

The battery energy storage industry may also be in for a rough ride. A preliminary AD/CVD decision on anode materials from China is due in May. If AD/CVD violations are found, tariffs could be as high as 920%, effectively doubling the cost of EV batteries, home batteries, and grid - scale storage in the United States.

"The battery market is currently in a state of significant distress due to these tariffs," Reisinger said.

According to an industry note from Phil Shen, managing director at Roth Capital Partners, the impact of tariffs is already being felt in solar module procurement. Roth predicts that the cost of residential solar projects is expected to "rapidly" increase by $0.10/W to $0.15/W. It also notes that the prices of lower - Tier 1 utility - scale solar modules have already increased by approximately 19%.

An industry contact informed Roth that current solar module contracts signed in 2025 "will likely face delivery issues." Roth's sources further cautioned that developing projects that have not secured solar modules, trackers, and/or inverters within the United States are now at risk of being halted.

The Solar Energy Industries Association estimates that between 2017 and 2021, due to tariff enforcement during Trump's first term, the US lost 62,000 jobs, $19 billion in private investment, and 10.5 GW of solar deployment.

"The renewables landscape has undergone a fundamental transformation," Reisinger concluded.