(Update: see our updated article, for the latest information on Section 301 tariffs and AD/CVD on solar imports)
The solar industry is facing significant changes in 2024 due to new tariffs on Chinese solar panels and ongoing investigations into solar panel imports. These potential tariffs are likely to impact prices and availability later in 2024 & through 2025.
Overview of the New Solar Tariffs and Trade Investigations
There are two issues that are may have significant effects on the solar industry in 2024:
- Section 301 Tariffs on solar panels & battery materials from China.
- The U.S. ITC trade investigation into solar anti-dumping and anti-cirumventing duties (AD/ACD) for panels manufactured in in Malaysia, Vietnam, Thailand, and Cambodia.
What the Section 301 Tariffs Mean for Solar
On May 14, 2024, the Biden administration announced expansions to the Section 301 tariffs on imports from China, targeting sectors such as solar panels, electric vehicles, batteries, and steel products. These tariffs will increase the duty on solar cells and battery components from 25% to 50%, with some taking effect in 2024 and others phased in through 2025 and 2026.
- Battery parts (non-lithium-ion batteries) will increase from 7.5% to 25% in 2024
- Electric vehicles will increase from 25% to 100% in 2024
- Lithium-ion electric vehicle batteries will increase from 7.5% to 25% in 2024
- Solar cells (whether or not assembled into modules) will increase from 25% to 50% in 2024
- Steel and aluminum products will increase from 0%-7.5% to 25% in 2024
(Note– this is not a complete list affected by the Section 301 tarrifs, just the parts to renewables)
While most solar panels in the US are not completely manufactured in China, many battery components are. This means that components for LFP batteries used in solar storage systems (think Tesla Powerwall 3 and Enphase 5P Batteries) may have their supply chain costs disrupted, or see increased costs. The EV market may also see an impact from the increased tariffs as well.
There have been extremely high tariffs on Chinese solar panels for years (25%). This has led to most companies relocating to other countries. That’s more-or-less what is under investigation in the next section, so while these higher tariffs likely won’t directly apply to panels you would be buying, they may trickle-down as more trade investigations occur.
How the U.S. ITC Investigation Affects Solar Prices
The investigation by the U.S. ITC, which began following a petition by U.S. solar manufacturers including First Solar and Qcells, aims to impose new anti-dumping and countervailing duties on crystalline silicon solar cells imported from Cambodia, Malaysia, Thailand, and Vietnam. The ITC’s preliminary determination found a reasonable indication that the domestic industry is injured due to these imports.
This investigation is expected to cause price increases in the solar market between Q3 of 2024 and throughout 2025. Speculation of tariffs alone spiked solar panel prices significantly in 2022, and some expect that to happen again, although with a slightly narrower focus. Brands like Hanwha Qcells, Mission Solar, REC and JinkoSolar, all of which are in support of the investigation, are unlikely to be directly affected, but other companies like Trina and Canadian solar may see significant price hikes if the ITC rulings are in line with the preliminary findings from the Dartment of Commerce.
This market instability comes at a time when the net-metering regulations in Virginia are also anticipated to change, making 2024 an ideal year to go solar before these new tariffs and regulations take effect.
What Does This Mean for Prospective Solar Customers?
We want our clients to be well-informed, and make the best decisions for themselves. It’s too early to say exactly what the the outcome of these actions will be, but we expect to see prices rise in the next year. If you’re shopping for residential solar, these increases are not likely to shatter the ROI, but it does mean that if you’re on the fence, you’ll likely get a better deal sooner rather than later.
For commercial solar customers, the increase in panel prices may hit a little harder, as material costs tend to take up a larger percent of total costs due to economies of scale. Solar panel prices are lower now than they have been since 2020, and with net-metering changes on the horizon in VA, small businesses that install solar now can lock in favorable rates.
Sources:
- FACT SHEET: President Biden Takes Action to Protect American Workers and Businesses from China’s Unfair Trade Practices
- NREL Fall 2023 solar industry update
- USITC VOTES TO CONTINUE INVESTIGATIONS ON CRYSTALLINE SILICON PHOTOVOLTAIC CELLS, WHETHER OR NOT ASSEMBLED INTO MODULES FROM CAMBODIA, MALAYSIA, THAILAND, AND VIETNAM
