How Trump’s latest tariffs could impact solar

The widespread tariffs announced by the Trump administration over the past week have rattled markets, caused confusion for businesses, and stoked fears of a recession. The president’s latest tariffs are expected to increase prices and disrupt supply chains across industries, and the solar industry is no exception.

For a better understanding of how Trump's new tariffs may impact the solar industry, let’s take a look at the most recent tariff announcements, how his previous tariffs affected the solar industry, and what it tells us about the types of trade policies we may see from the Trump administration moving forward.

While the Trump administration announced a 90 day pause on plans to enforce reciprocal tariffs, it still moved forward with implementing a 10% tariff on most global trading partners and a 145% tariff rate on China, putting additional pressure on the solar industry. Tariffs increase prices and disrupt supply chains, and solar manufacturing isn’t immune to these impacts. As the tariffs are enforced, the cost of going solar will increase for homeowners across the U.S.

As U.S. trading partners and markets absorb the shock of Trump's new tariff policies, it remains uncertain what additional short and long-term consequences will arise for the solar industry. While rising prices and manufacturing headaches are to be expected, it's too soon to tell how far-reaching the ramifications will be.

“Tariffs are like the game whack-a-mole. As soon as you crack down on manufacturing in one country, another springs up to take its place,” said Aaron Nichols, a marketing and advocacy specialist at Exact Solar.

For now, how the tariffs will play out is still coming into focus, but Nichols thinks it’s possible that domestic manufacturing could become a requirement to receive a tax credit, for example. One impact that seems clear so far, however, is that battery storage is likely to take a significant hit from the latest tariffs, as the U.S. still relies heavily on importing them from China.

The first Trump administration made enforcing tariffs a key part of its trade policy. In 2018, Trump imposed Section 201 tariffs on solar panels imported from foreign countries, aiming to bolster American solar manufacturers. While American solar panel manufacturing did see an expansion, installation costs for homeowners escalated as a result. 

However, during President Trump’s first term, the solar industry still experienced an expansion, increasing 128% and reaching 100 gigawatts (GW) of installed solar. Despite that growth, Trump's tariffs still negatively impacted the industry, according to the Solar Energy Industries Association (SEIA):

• Tariff increases led to 62,000 fewer solar jobs 

• Installation prices for homeowners increased 

• $19 billion in new private sector solar investment was lost

During his four years in office, former President Biden expanded on the tariffs that were originally imposed during the first Trump administration. In 2024, Biden raised tariffs on photovoltaic cells from 25% to 50%, and imposed anti-dumping laws meant to stop U.S. companies from importing underpriced solar imports.These changes presented a challenge for the solar industry by impacting the availability and cost of solar equipment. 

Increase in Section 201 and Section 301 Tariffs

In 2024, the Biden administration increased Section 201 tariffs on specific Chinese imports. Under the CHIPS Act, this increase included certain solar panel components, such as the silicon used in solar cells. At the end of the year, the U.S. Trade Representative’s office also announced a 25% increase on Chinese-made solar wafers and polysilicon. Duties on certain tungsten products also rose from zero to 25%. Those hikes went into effect on the first day of January 2025.

Enforced Anti-dumping Laws

The Biden administration also enforced anti-dumping laws and countervailing duty  investigations in 2024 in major solar manufacturing countries, including Cambodia, Malaysia, Thailand, and Vietnam. Those laws are meant to prevent foreign solar panel manufacturers from flooding the U.S. market.

Despite potential increases in costs and installation, solar is still a smart investment and a growing industry. Since 2000, more than 219 gigawatts (GW) of solar capacity has been installed nationwide, which is enough to power over 37 million homes.

According to Nichols, solar is still a great “long-term choice for homeowners and business owners looking to cut energy costs and contribute to the stability of our electric grid.” Shifts in policy will impact the cost of solar in the short term, “but that doesn't change the fact that solar technology is cheaper, more efficient, and more reliable than it's ever been.”

Fewer imports from Southeast Asia and China could disrupt the supply chain

In 2025, experts like Adam Bushell, director and electrician at AB Electrical & Communications in Sydney, Australia, say we should “expect a period of transition in which households may encounter delays or increased expenses while the sector changes.”

An increase in tariffs on Southeast Asia and China likely means an increase in production costs and limited inventory for the short term. However, that may benefit America’s solar manufacturers by reducing competition in the long term.While a major reduction in solar equipment coming in from other countries is an opportunity for American companies, it means they’ll have to work to stabilize the supply chain in order to meet consumer demand.

“An expanded domestic supply chain could ultimately stabilize prices, but that transition could take years,” Nichols says. “In the short term, it would likely shrink the market.” So while these increases may mean it will be harder and more expensive to get solar equipment quickly in 2025, it could mean a more sustainable solar supply in the long run.

New tariffs will likely increase upfront costs

Both new and higher tariffs mean the cost of installing solar is likely to rise in 2025. While some of Trump’s newest tariffs have already gone into effect, solar costs probably won’t rise immediately. If you plan on installing solar in 2025, Bushell recommends that homeowners begin gathering quotes as soon as possible, “since locking in contracts before tariffs have a significant impact on price may save them money.”