U.S. industries are broadly grappling with the new foreign trade policy environment onset by President Donald Trump’s “reciprocal tariffs” that apply to most goods from most countries. The tariffs vary by country of origin, generally range from 10% to 50%, and exceptions are placed on specific goods and materials.
Trump’s reciprocal tariffs are expected to raise energy costs broadly across technology types and solar is no exception.
The solar industry is quite familiar with tariffs on imported goods. In 2024, about 75% of solar cells and modules were imported, and the United States imported over $16.5 billion in solar modules and cells, according to U.S. International Trade Commission data.
Most of the global supply chain originates in China, which is subject to 50% tariffs to solar wafers, cells and module imports under Section 301 designation. Now, the reciprocal tariff rate adds 34% to this total.
Chinese suppliers largely have moved their supply chains to Vietnam, Thailand, Malaysia and Cambodia to supply the U.S. and avoid these steep tariffs. The four nations account for over 80% of U.S. solar module supply.
But the four Southeast Asian nations are subject to an antidumping and countervailing duty (AD/CVD) investigation, and if found in violation of AD/CVD laws, they are subject to tariffs that historically range 50% to 250%.
What’s more, these suppliers are now attached with reciprocal tariffs, which stack on top of AD/CVD duties. This includes Vietnam (46%), Malaysia (26%), Thailand (36%) and Cambodia (49%).
Reacting to AD/CVD enforcement, solar suppliers continued to relocate factories, with significant supply moving to Laos and Indonesia. But now under Trump’s reciprocal tariffs, goods shipped from those countries are subject to 48% and 32% tariffs, respectively.
“This has some real significant impact,” said Stefan Reisinger, partner, Norton Rose Fulbright in a recent podcast. “A lot of money was spent building factories there. This order targets some of those main producers.”
While the U.S. has made strides in onshoring solar module manufacturing, domestic supply falls well short of demand. Upstream stages of manufacturing including polysilicon refinement, wafer and cell manufacturing are critically undersupplied. Factory investments hang in the balance as the industry awaits a Republican Congress’ decision on clean energy manufacturing tax credits created by the Biden-era Inflation Reduction Act.
What’s more, Trump enforced 25% tariffs on steel and aluminum imports. Both materials are an essential part of a solar project’s cost stack, contributing to panel frames as well as mounts and racking.
The battery energy storage industry may also have serious pain on the way as a preliminary AD/CVD decision is due in May on anode materials from China. Tariffs can be assessed as high as 920% if AD/CVD violations are found, which would effectively double the cost of EV batteries, home batteries and grid-scale storage in the United States.
“The battery market is in significant distress right now as a result of these [tariffs],” said Reisinger.
In solar module procurement, the damage is already being felt, according to an industry note from Phil Shen, managing director, Roth Capital Partners. Roth said that residential solar projects are expected to “quickly” increase by $0.10 to $0.15 per watt. It said that lower Tier-1 utility-scale solar module prices have already increased by roughly 19%.
An industry contact told Roth that current signed solar module contracts in 2025 “will have trouble to deliver.” Roth’s contacts further warned that developing projects that don’t have solar modules, trackers and/or inverters secured inside the United States are now at risk for being halted.
The Solar Energy Industries Association estimates that 62,000 U.S. jobs, $19 billion in private investment, and 10.5 GW of solar deployment was lost between 2017 and 2021 due to tariff enforcement during the first Trump term.
“It’s a changed world in the renewables space,” said Reisinger.
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