How Tariffs Are Shaping the U.S. Solar Market in 2025

The U.S. solar market in 2025 is undergoing dramatic shifts as a result of sweeping new tariffs on imported solar panels, batteries, and related components. These policy changes are fundamentally altering the cost structure, supply chain, and competitive landscape for solar installers, manufacturers, and consumers.

The 2025 Tariff Landscape

In April 2025, the U.S. Department of Commerce finalized a series of anti-dumping and countervailing duties (AD/CVD) on crystalline silicon solar cells and modules imported from four Southeast Asian countries: Cambodia, Vietnam, Malaysia, and Thailand. These countries have supplied the majority of U.S. solar imports in recent years, especially as earlier tariffs on Chinese panels pushed production to Southeast Asia.

Tariff rates are unprecedented: Some Cambodian manufacturers now face duties as high as 3,521%, with other countries seeing rates from 24% to 49% for “reciprocal” tariffs, and additional AD/CVD duties layered on top.
China faces a 145% tariff, while a baseline 10% tariff remains for most other partners-though these rates are subject to ongoing negotiation and temporary pause.
The tariffs now extend beyond panels: Inverters and battery storage systems, crucial for solar-plus-storage solutions, are also subject to new and higher duties.

Impact on Solar Material and Installation Costs

Solar Panel and Equipment Prices

Panel costs are rising: Most solar panels are expected to see a cost increase of 3 to 4 cents per watt due to tariffs, with additional balance-of-system costs (inverters, racking, etc.) adding another 2 to 3 cents per watt.
Residential module prices: According to industry reports, residential solar module prices have increased by $0.10 to $0.15 per watt in 2025, with utility-scale prices rising by roughly 19%.
Average system costs: The national average cost-per-watt for solar in early 2025 is around $2.50–$2.56 per watt (before incentives), but these averages are likely to climb as new tariffs take full effect.

Battery Storage

Batteries are hit even harder: Battery Energy Storage Systems (BESS), which rely heavily on Chinese supply chains, face even steeper price hikes-previously forecasted at 20–30% and potentially rising further as tariffs bite.
This is expected to slow U.S. battery deployment, with 2025 installations falling short of earlier projections.

Raw Materials and Supply Chain

Material costs are up: The price of raw materials (silicon, aluminum, glass) and construction inputs has also risen due to both tariffs and global supply chain disruptions.
Module manufacturing costs: U.S.-made solar panels cost about 28 cents per watt to produce, compared to 16–19 cents per watt for Chinese panels-a gap that tariffs are intended to help bridge, but at the expense of higher consumer prices in the short term.

Market and Industry Responses

Stockpiling: Anticipating tariff hikes, many U.S. solar companies have stockpiled imported panels, with inventories estimated at up to 50 GW-roughly the amount deployed in all of 2024. This buffer may temporarily cushion price increases, especially for rooftop solar, but is expected to run out as the year progresses.
Supply chain reshuffling: Companies are shifting procurement to countries not targeted by tariffs (such as India, Indonesia, and Laos) and accelerating investments in domestic manufacturing.
Domestic manufacturing ramp-up: The U.S. now has 44 GW of module manufacturing capacity online, which could offset some of the price increases as more American-made panels enter the market.

The Bigger Picture: Short- and Long-Term Effects

Short-term: Expect higher prices, project delays, and tighter margins for installers and developers. Homeowners and businesses may see increased upfront costs for solar and storage projects.
Long-term: If domestic manufacturing scales rapidly, the market could stabilize and become less dependent on imports, potentially bringing prices back down. However, this transition will take years, and the current uncertainty is already slowing deployment and investment.

By the Numbers: 2025 Cost Increases

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Major Solar Panel Manufacturers with U.S. Facilities

First Solar: Headquartered in the U.S., First Solar is the largest American-based solar panel manufacturer. It operates large manufacturing plants in Ohio and Alabama, with a capacity of over 10 GW. First Solar specializes in thin-film (CdTe) solar panels, primarily for utility-scale project.
Qcells: While Qcells is owned by South Korea’s Hanwha Solutions, it has built major manufacturing facilities in Georgia. Qcells produces a significant volume of panels in the U.S. and is working toward a more domestic supply chain, though some raw materials are still imported.
Canadian Solar: Despite the name, Canadian Solar has a large manufacturing facility in Texas, producing around 5 GW of panels annually. The company employs American workers and is ramping up U.S. production.
Illuminate USA (LONGi Solar): This is a joint venture between U.S.-based Invenergy and China’s LONGi Solar, with a major plant in Ohio.
T1 Energy (Trina Solar): Located in Texas, this facility is a joint venture that produces about 5 GW of panels per year.

Other Notable U.S. Solar Manufacturers

Silfab Solar: Operates factories in Washington state and is known for high-efficiency panels with strong warranties‍.
Mission Solar: Based in San Antonio, Texas, Mission Solar manufactures panels for residential and commercial markets‍.
Heliene: With a plant in Minnesota, Heliene supplies panels for various scales of solar projects.
Auxin Solar: Based in California, producing panels for the U.S. market.

Key Points on U.S. Solar Manufacturing

Growth and Expansion: The U.S. solar manufacturing sector has expanded rapidly, driven by government incentives such as the Inflation Reduction Act. New factories are being built, and existing ones are scaling up‍.
Supply Chain: While many panels are assembled in the U.S., the actual solar cells (especially crystalline silicon cells) are often imported, mainly from Asia. First Solar is an exception, as it manufactures thin-film cells domestically. Qcells is working on building a more complete U.S. supply chain but currently relies on some imported materials.
Variety of Companies: The market includes both American and foreign-owned companies with U.S. manufacturing operations, employing thousands of American workers and supporting domestic energy independence‍.

The U.S. solar manufacturing industry is robust and growing, with a mix of domestic and international companies producing solar panels across the country. If you want to ensure your solar panels are made in America, you have a range of reputable options to choose from.

Conclusion

Tariffs in 2025 are reshaping the U.S. solar market by driving up the cost of imported panels, batteries, and other components.

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