The steel supply crunch threatening U.S. solar ambitions

The American steel market has rarely looked this tight. Domestic mills are booked through the end of 2025, and customers across industries are scrambling to secure material. For builders, automakers, and renewable energy developers, the supply pipeline is simply clogged.

What could have been dismissed as a normal cycle has been hardened into something far more serious. Trade policies have compounded the shortage. The 25 percent Section 232 tariff has been in place since 2018, but in June 2025, the U.S. doubled the duty to 50 percent, Council on Foreign Relations, April 2025. For India, which shipped nearly half a billion dollars of iron and steel to the U.S. last year, the move was crippling. These duties may have been meant to shield domestic producers from oversupply abroad, but the timing could not be worse for downstream industries that depend on steady inputs to keep projects moving.

India’s role

India is not America’s largest steel supplier; Canada, Brazil, and South Korea dominate in tonnage. Yet India fills a strategic niche, exporting specialized flat-rolled and structural products that are difficult to substitute. These grades flow directly into infrastructure and renewable energy projects.

In 2024, U.S. imports from India totaled roughly 487 million dollars. That number looks modest against the nation’s overall steel trade, but the concentration matters. Much of it ends up in solar farms, racking systems, and modular structures. Developers favored Indian material not only because it was cost-competitive, but also because it reliably met the standards of strength and galvanization. The new tariffs cut off that option overnight.

Solar in the crosshairs

Few industries feel the squeeze as sharply as solar. Steel is not just an input; it is the skeleton of every project. Mounting structures, racking, and single-axis trackers are all steel-intensive. Their performance—resistance to wind loads, corrosion protection, and structural integrity over 25 years—depends on reliable material.

These systems account for 10% to 15% of a project’s total cost.. Tariffs that push up prices by half have an immediate and painful effect on project economics. Developers who set budgets in 2024 are finding those numbers obsolete. Worse, the problem is not only about price, but also about availability. Mills are oversold, and even buyers who are prepared to pay more often cannot get the tonnage they need. That reality is already rippling into project schedules, said a report from Reuters. Developers are stretching timelines, postponing installations into 2026, and revising financial models to account for higher capital expenditure. Every delay slows the renewable energy buildout that federal and state policies are trying to accelerate.

A double squeeze

The tariff shock is only half the story. At the same time, U.S. solar manufacturers have asked the Department of Commerce to impose anti-dumping and countervailing duties on solar cells and modules imported from India, said Reuters. Their claim is that Indian producers are subsidized and are pricing below cost. If those duties are enacted, it will raise module prices just as mounting structures are already becoming more expensive.

That creates a double squeeze. On one side, the steel that holds solar projects together is harder to get and more costly. On the other hand, the panels that generate electricity may soon face their own barriers. Margins erode. Installations stall. The U.S. loses ground in global competitiveness as other countries press ahead with lower-cost renewable energy deployments.

What executives should do

For senior leaders, this is not a problem to watch passively. It demands action. Several strategic responses stand out.

Manage price risk proactively:

Steel prices are already climbing, and they will climb further. Companies must consider hedging, locking in long-term fixed contracts, or building pricing flexibility into customer agreements. Waiting to see where the market settles is a gamble few can afford.

Prepare for project delays.:

Supply constraints are real. Executives should not assume that paying more will solve the problem. Instead, project teams need to evaluate phased or staggered execution and communicate realistic timelines to regulators, investors, and customers. Transparency now will preserve trust later.

Reinforce investor confidence:

Trade volatility has made financing more complicated. Lenders want predictability, but right now, uncertainty dominates. Developers who can demonstrate diversified sourcing strategies, strong supplier relationships, or alternative procurement pathways will be better positioned to secure capital.

Consider vertical integration or partnerships:

Some firms are exploring joint ventures with domestic steelmakers to secure priority access. Others are weighing in-house fabrication for racking and trackers. Neither option is inexpensive, but both reduce exposure to tariff risk and improve supply reliability.

Policy questions

The shortage also exposes a policy dilemma. On the one hand, tariffs protect domestic producers and manufacturing jobs. On the other hand, they slow renewable deployment at a time when the Inflation Reduction Act and state mandates are pushing the U.S. to build clean power at unprecedented speed.

Targeted exemptions for renewable infrastructure may be the most pragmatic answer. Section 232 has been flexed this way before when supply shortages threatened national interest. A carve-out for solar would not eliminate the challenges, but would alleviate the most severe bottlenecks.

Another path is to encourage domestic capacity dedicated to renewable-grade steel. Incentives for galvanizing lines, structural production, or lightweight flat-rolled materials could build resilience over time. But new capacity takes years and billions of dollars. It will not help developers already facing delays.

The global dimension

This is not just an American problem. Steel markets are tight everywhere. Europe and Southeast Asia are also competing for supply to support their own infrastructure programs and energy transitions. Diverting imports from one region to another is not realistic.

India, for its part, has begun imposing safeguard duties on certain imports to shield its producers, Economic Times, August 2025. That signals a more protectionist posture globally. U.S. buyers should not assume they can simply pivot to other suppliers without encountering similar headwinds.

A pivotal moment

The U.S. now faces a crossroads. Trade protection has long been framed as a way to bolster industrial strength. However, the energy transition relies on affordable and timely steel, and these two goals are in conflict. Business leaders are caught in the middle.

This is the moment for clarity. Executives must diversify their supply, rethink procurement strategies, and, in some cases, invest directly in capacity. Policymakers must weigh the costs of protectionism against the urgency of climate goals. If both groups continue along parallel paths without coordination, the result will be predictable: slower renewable deployment, higher costs, and lost ground in the global race for clean energy.

America has the talent, capital, and policy momentum to lead the way. But without steel, the foundation of every solar project, ambition alone will not be enough.

Venkata Ravi Kumar Jonnalagadda is an engineering, operations, and quality leader with more than 15 years of experience driving innovation in advanced manufacturing and renewable energy. He has directed plant startups, implemented ISO/IATF-certified quality systems, optimized production operations, and led global supply chain risk programs that support the U.S. clean energy transition. His work has strengthened manufacturing resilience and positioned him as a recognized voice in sustainable technologies and quality leadership.

The views and opinions expressed in this article are the author’s own, and do not necessarily reflect those held by pv magazine.

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