On May 15, 2024, the Biden administration announced significant changes to tariffs and policies, many of which will involve solar system components and materials. These measures are designed to encourage US manufacturing, but are expected to increase solar prices across the board.
Even more recently, economists predicted that President-elect Donald Trump's administration would implement up to 40% blanket tariffs on all goods from China (in contrast to the 60% he proposed earlier this year).
As part of our mission towards bringing solar prices and commissions down, we’ve put together a breakdown of the upcoming changes to help you get the best price possible.
What's Happening?
In the past few years, the solar industry has boomed, but lower pricing from overseas has meant domestic manufacturers aren’t ramping up to the US government’s target levels.
To combat high volumes of imports, steps have been taken to increase domestic manufacturing. These include changes to regulations and increases on tariffs:
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Increased Tariffs for Select Goods. Plans have been announced to increase tariffs on semiconductors, solar cells, batteries, and more.
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Removal of Bifacial Model Exclusion: Bifacial solar panels, which increase efficiency by capturing sunlight on both sides, were formerly exempt from tariffs in some cases. This exclusion is now being removed, meaning these panels will be subject to the same tariffs as other solar products.
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End of the "Solar Bridge": In 2022, President Biden initiated a temporary, 24-month-long "Solar Bridge" to facilitate and expedite solar imports from Cambodia, Malaysia, Thailand, and Vietnam duty-free while US domestic manufacturing ramped up.
This bridge ended on June 6, 2024. To prevent stockpiling, the Solar Bridge regulation requires that duty-free imported solar panels must be installed within 180 days: a policy which Customs and Border Protection has said it will boldly enforce.
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Increased Quotas for Imported Solar Cell Manufacturing: To make sure domestic manufacturing is heading towards target levels, the tariff-rate quota for imported solar cells will be increased from 5 gigawatts to 7.5 gigawatts.
- Blanket Tariffs on International Goods: President Trump has repeatedly indicated that he will impose heavy tariffs on international goods when he takes office--though we don't yet know the exact details of this plan, we expect to know more in the next couple months.
These changes are expected to cause significant price increases on many goods, including solar products, at least until the market stabilizes and US manufacturers increase their output.
Without knowing exactly what changes are to come, it is impossible to say how long it will take US manufacturers to catch up and for prices to level out.
Key Deadlines
While there’s little that can be done to prevent these changes, it’s possible to largely avoid some of the price increases by installing solar before many of these changes take effect.
There are three scheduled tariff increases for solar-related goods:
August 1, 2024: First Tariff Increases Takes Effect - PAST
- Main Concern: Tariffs on solar cells (whether or not assembled into modules) will double from 25% to 50%.
- Other products affected include non-lithium-ion batteries, electric vehicles, facemasks, some critical minerals, steel/aluminum products, and medical supplies.
January 1, 2025: Second Phase of Increases - UPCOMING
- Main Concern: Tariffs on semiconductors–including silicon, which is used in solar panels–will double from 25% to 50%.
- Other affected items include various tech components.
January 1, 2026: Third Phase - UPCOMING
- Main Concern: Tariffs on lithium-ion non-electric vehicle batteries will rise from 7.5% to 25%, which includes many popular solar batteries.
- Additional products impacted are medical gloves, natural graphite, and permanent magnets.
2025-2028: Tariffs from New Administration - UNCERTAIN
- Main Concern: Blanket tariffs on goods from China, possibly up to 20% from other countries
- From what we know now, these tariffs may impact all imported goods
The Good & The Bad: What This Means for You
As discussed previously, tariffs are designed to boost domestic production, which will (in theory, at least) help to eventually improve the health of the solar industry in the US.
Unfortunately, the immediate consequence of high tariffs will be higher prices for customers.
In particular, solar panels, solar batteries, and other system component prices are expected to rise, as specific policies have already been outlined for them. Some estimate that tariffs could inflate solar costs by 91 to 286%.
Even US-made product prices are likely to increase due to the tariffs on raw materials.
As the solar industry and overall economy adapts to these changes, it's crucial to stay informed and plan accordingly. If you're considering investing in solar energy, now is the time to act: before further tariffs go into effect.
To get a no-hassle, low priced quote, get started with Project Solar’s instant online calculator.
