Solar Panel Tariffs, Prices, and the Future of Renewables
Tariffs on solar panels from China have been in place for years, although the purpose of those was to prevent anti-competitive and arguably illegal practices. After a series of escalating tariff announcements, tariffs on all Chinese goods are now effectively over 100%. Determining how much these tariffs will delay the United States’ transition to renewable energy is difficult, but the immediate impact will be seismic.
2018’s Section 201 Tariffs
The Trump Administration’s tariff policy on solar panels dates back to 2018, when it announced a 30% tax on imported panels and modules. The policy included annual reductions of 5% until it reached an effective rate of 15% in 2022. It’s important to note that the US, Canada, the European Union, and other nations have had some level of tariffs on solar products for decades, primarily designed to protect native manufacturing.
The 2018 tariff specifically addressed anti-dumping practices, with Chinese manufacturers dumping heavily subsidized solar panels in overseas markets. The impact was dramatic. The SEIA estimated the tariffs led to 62,000 fewer jobs in manufacturing and installation. California, Texas, and Florida were among the worst affected.
The Biden Administration extended the Section 201 tariffs, continuing the annual reduction from 14.75% by 0.25% annually. The Inflation Reduction Act of 2022 also introduced solar tax credits of up to 30% through 2032. This action is forecast to increase US solar capacity by 40% by 2027.
Solar Tariffs in Trump’s Second Term
The recent spate of tariffs is much broader and includes a range of imported goods and related solar components. Instead of targeted panels, 2025 tariffs also include inverters, batteries, and other equipment critical to production and installation. The tariffs also include other Southeast Asian countries, many of which have served as “China plus one” suppliers in the pandemic-era shift toward manufacturing diversification. Vietnam, Malaysia, and Thailand face some of the most substantial tariff increases if the 90-day delay isn’t made permanent.
It’s critical to understand just how dependent the US solar industry is on these nations. Eighty percent of solar-related imports come from Southeast Asia, and domestic manufacturing cannot scale quickly enough to fill the gap.
How Will Tariffs Impact Solar Panel Prices?
The new tariffs will likely increase the cost of solar panel imports by 10-15% and discourage investment in solar energy, especially at grid scale and particularly rural installations. This will also extend the payback period on new projects, which may dull the appeal of solar installations for businesses and homeowners alike. The ROI period will likely increase by 2-3 years and may make other energy investments more attractive, particularly improved insulation and commercial lighting.
All of these factors have pushed small businesses to prioritize solar panel investments before price increases become permanent. Starting new projects during the 90-day delay allows businesses to access onshored panels before the tariffs were enacted, locking in lower product and installation prices at lower rates.
Start Your Solar Project with Keen Technical Solutions
While tariffs will impact the industry, we have no doubt about the long-term advantages of on-site power generation for small businesses across market verticals. With Keen Technical Solutions, you’ll benefit from deep experience sourcing quality solar panels and system design. We’ll help you tap into grants, rebates, and financing to reduce upfront barriers and shorten your return timeline. It’s a great time to get started.
Contact us to speak with an energy consultant today