A tightened U.S. solar trade environment

AI generated summary

The U.S. solar trade environment is undergoing significant changes as new laws aim to boost domestic manufacturing, with imports currently accounting for about 75% of solar cells and modules. The landscape is complicated by various tariffs, including a 10% baseline tariff introduced by President Trump in 2025, and substantial tariffs on solar components imported from China, which could lead to a decrease in installed solar capacity in the U.S. and Europe by 2035. Additionally, the U.S. Department of Commerce has enforced antidumping and countervailing duties (AD/CVD) on suppliers from Southeast Asia, raising concerns about the supply chain for solar cells.

Recent legislation has also introduced stringent restrictions on foreign entities of concern (FEOC), impacting federal tax credits for solar projects. Projects found to have material assistance from prohibited foreign entities, particularly from countries like China, Russia, and Iran, will be ineligible for tax credits. As the requirements for domestic content increase over the coming years, the solar industry faces challenges in meeting these standards while relying heavily on imports, potentially disrupting the supply chain at a critical time for solar energy development in the U.S.