Trump Imposes Minimum Price and Tariffs on Solar Panel Imports to Boost US Industry
US President Donald Trump has introduced a new and unusual trade measure targeting solar panel imports. In addition to a 15% tariff on polysilicon components used in solar panel assembly, the presidential order sets a minimum import price expected to increase costs by about 40%. The declared goal is to strengthen the US industrial base and reduce dependence on China, which currently dominates the market.
The tariffs and minimum price, set at 38 cents per watt for solar panels and corresponding prices for upstream components, will take effect in December 2024. This timing follows a planned summit with Chinese President Xi Jinping in September, suggesting the measures may also serve as leverage in trade negotiations. The US Department of Commerce concluded that polysilicon imports threaten national security, authorizing Trump to impose these tariffs under Section 232 of the Trade Expansion Act.
Israeli solar companies operating extensively in the US market, including Enlight, Doral, Nofar, and OPC, are expected to face higher installation costs due to the price increase from 27 to 38 cents per watt. However, much of the equipment for projects currently underway has already been ordered, insulating these companies from immediate impact until at least 2028. Future years remain uncertain, with potential policy changes depending on the US administration.
The law allows for exemptions from the minimum price and tariffs if companies commit to investing in US manufacturing infrastructure starting in 2029. Some companies, such as China's T1 and Canada's Canadian Solar, have already decided to relocate production to the US. Despite this, tariffs on raw materials and intermediate products will still apply.
Industry analysts predict that electricity prices in the US could rise by $4 to $5 per megawatt-hour, costs that will likely be passed on to consumers but partially offset solar developers' increased expenses. The booming demand for electricity, driven by AI data centers, gives solar developers strong negotiating power to share tariff costs with large electricity consumers. The overall economic impact will depend on how quickly the market adjusts prices for electricity and subcontractors.
