Industry focus
Solar Energy's crossroads — growth meets trade turbulence
By Sara Zetune, Director, Energy
A sector on the rise
Solar power is growing fast in the U.S. In 2020, it made up just 3.2% of the country’s energy. By 2024, that had more than doubled to 6.9%. In 2025, solar is expected to lead all new utility-scale energy. It will add about 32.6 gigawatts of new power.
But there’s a storm on the horizon
New trade policies could shift that trend. The U.S. is considering new tariffs on solar cells and modules imported from Thailand, Vietnam, Malaysia, and Cambodia. These would be anti-dumping and countervailing duties, which are meant to address unfair trade practices. While the goal is to protect U.S. manufacturers, the tariffs could also increase costs for solar projects and put pressure on supply chains.
A closer look at the numbers
Since 2012, the U.S. has placed tariffs on Chinese solar products. These include anti-dumping and countervailing duties. Anti-dumping duties apply when foreign companies sell goods below market value to undercut U.S. producers. Countervailing duties apply when foreign governments give subsidies that create an unfair edge.
In April, the U.S. Department of Commerce found that some Chinese companies were avoiding these rules. They sent products through Thailand, Vietnam, Malaysia, and Cambodia after doing only basic processing there. These four countries now supply about 80% of the solar panels used in the U.S.
Because of this, the U.S. is reviewing whether the same duties should apply to those countries. As of now, the International Trade Commission is deciding whether U.S. solar companies have been harmed. If they say yes, the new tariffs could move forward.
These countries already face a 14% solar tariff, which ends in early 2026. In April 2025, a new 10% reciprocal tariff also took effect. This is expected to rise higher with country-specific rates over time.
What it means for developers
If tariffs are expanded to include more Southeast Asian products, developers could face a 15% to 20% jump in capital costs for utility-scale solar projects. The result would be an increase in the average pre-tax levelized cost of energy (LCOE) estimated by the Lawrence Berkeley National Laboratory to around $55 per MWh.
Other construction materials are also pushing costs higher. Structural steel, which already has a 50% import tariff, is a key part of mounting systems, trackers, and supports. On its own, it could add another 5% to 8% to total project costs.
LCOE (Levelized Cost of Energy) shows the average cost to build and run a power plant over its lifetime, divided by the total energy it produces. It’s a simple way to compare the long-term value of different energy sources.
Short-term resilience
Despite the pressure, developers are getting ready. Many built up inventory ahead of policy changes and may have stockpiled as much as 50 GW of solar panels in 2024.
At the same time, federal tax incentives are helping to offset some of the financial impact. For now, this has helped keep projects on track.
Longer-term opportunity
There’s another side to this story. Tariffs and incentives are not only about cost, they are also about control. The U.S. solar market depends heavily on imports, especially from China. According to the International Energy Agency, China controls 80% of the global solar supply chain.
Stronger trade policies and new incentives could help build a more reliable supply chain in the U.S. And there are signs it is already happening.
A manufacturing shift
The U.S. added solar duties in 2012. Since then, companies like First Solar and Qcells have grown their production. The numbers are clear. Tariffs and tax breaks can help boost solar manufacturing in the U.S.
Reports from the Massachusetts Institute of Technology and the Rhodium Group show that U.S. investment in solar manufacturing grew tenfold between 2022 and 2024. This is a major step forward.
So far, most of the focus has been on the final assembly of solar modules. But for full control, the U.S. needs to expand ‘upstream’ manufacturing too. That includes polysilicon, ingots, wafers, cells, and modules.
What needs to happen next
To keep up the momentum, more strategic investment is needed. That includes:
- Training a skilled workforce
- Funding R&D across the value chain
- Modernizing infrastructure to support new solar plants
These aren’t quick wins, but they are essential if the U.S. wants a solar sector that’s scalable, cost-effective, and future-ready.
What should developers do now?
The solar market is expanding, but with higher costs, shifting policies, and trade turbulence, it's getting harder to navigate.
Expect disruption. New tariffs could delay shipments and increase costs. Developers who act early will be in the strongest position to adapt.
Now is the time to rethink resilience. Tax credits and stockpiles have softened the blow, but they won’t last. The pressure is building, and the risks are growing.
Developers need to act. That means:
1 Using existing inventory where possible
2 Diversifying procurement sources
3 Monitoring trade developments closely
4 Reviewing sourcing strategies and updating project timelines