How Tariffs Might Impact Solar in 2025

There’s a lot of talk about tariffs these days and as consumers are considering going solar it’s important to understand what the impact of tariffs might be for the solar industry.

Believe it or not, solar in the United States is somewhat synonymous with tariffs. For more than a decade the industry has been dealing with allegations of predatory trade practices by Chinese companies. Although the cost to install solar in the United States is higher than elsewhere in the developed world, the industry continues to grow in the U.S. 

The good news is that there’s been significant investment in solar manufacturing in the U.S. so the industry is somewhat insulated from the impact of tariffs. But not every solar component is made here so there is some cost exposure. 

Do solar panels come from China for the US market?

There are virtually no imports of silicon solar cells or panels from China to the U.S. due to hefty duties in the form of Section 301,  Section 201, and anti-dumping/countervailing duty tariffs. It’s not important to understand what all of those mean, just know that it’s cost-prohibitive to send solar panels from China to the U.S. 

Ever since these large duties were placed on exports from China, many Chinese solar companies moved production to Southeast Asia. Until 2024, roughly 80% of solar panels installed in the U.S. were manufactured in Cambodia, Malaysia, Thailand, and Vietnam. Because of this shift in production a consortium of US companies filed a trade case in 2024 against those four countries and, although the case is still being investigated, preliminary duties are substantial. 

Tariffs and U.S. Solar Manufacturing

According to the Solar Energy Industries Association (SEIA), there is currently 50 Gigawatts of solar panel manufacturing in the U.S., enough to meet annual demand. If something is made here that means there’s no tariff, right? Well, not exactly. Because a lot of the sub-components used to make solar panels and other solar equipment are imported they’re subjected to duties. For example, 25% tariffs on steel and aluminum are felt not only by racking suppliers but also solar panel manufacturers as frames are typically made of aluminum. Outside of cells, frames are the single most expensive sub-component in a solar module, so a 25% duty may increase the cost by a few cents per watt on American-made solar modules.

It’s worth noting that solar modules make up less than 20% of the total cost of installing a home solar system. So, a slight increase in module prices may not feel as substantial in the context of the whole project.

The broader and more expansive tariffs become it’s increasingly likely that these costs will impact the price of components used for solar construction. While reshoring manufacturing is the ultimate anecdote to tariffs these are capital and time-intensive projects that can’t be done overnight. 

Who pays for tariffs?

The simple answer is the importer of record pays for the tariffs. They can either choose to absorb the duty or pass it along to the ultimate buyers. Specifically in the solar industry due to years of intense price competition, no manufacturer has the ability to absorb the tariffs. This means we can anticipate continued price increases for solar components. 

Is now a good time to go solar?

Yes! Consumers who are considering going solar should get competitive price quotes. The faster your project is quoted the faster you can lock in pricing before new tariffs take effect. And, with the risk of the 30% tax credit going away, waiting could cost you several thousand dollars. 

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