China dominates solar. Trump tariffs target China. For US solar industry, that means higher costs

China accounted for at least 80% of the components of solar panels as recently as 2022, according to an International Energy Agency report, especially polysilicon, glass and solar cells. Solar also demands increasing critical mineral supplies, of which China is a key player across the globe, and electronics.

In the U.S., private industry has poured $18.2 billion into developing a domestic supply chain in recent years, according to Atlas Public Policy, that includes everything from the ingots and wafers that make up panels to electrical and structural components to assembly of the panels themselves. Most of that came from the Inflation Reduction Act passed during former President Joe Biden's administration, with massive funding for clean energy investment.

But that won’t come close to replacing what China produces.

“Really everybody’s losing when you think about it, because the systems are costing more for the customers and it’s also just making it more difficult, in some ways, for us to do business,” said Brian DiPaolo, assistant sales manager at Cleveland-based solar installer YellowLite, which is doing Summers’ project. DiPaolo said some customers are holding off on plans until there is more clarity. The company still stocked up on solar panels, made in North America, a month ago to stay competitive in coming months.

“We’re seeing both international as well as domestic manufacturers of the equipment increasing their costs to prepare for the tariffs," DiPaolo said. “You think that the domestic manufacturers would keep their prices down because they don’t get hit by the tariffs, but they’re seeing this added demand for their equipment.”

It’s supply and demand, said Martin Pochtaruk, CEO of Heliene, which focuses on large-scale solar projects. He described the price of a necessary glass component from China going up in February due to a tariff hike. Suppliers in other countries matched the higher price, meaning higher costs no matter the source.

Alexis Abramson, dean of Columbia University's Climate School, said there's no doubt that residential solar is going to be more expensive. That will cut solar adoption, and small and mid-size installers will go under, she said.

It’s just “extremely difficult to offer current and future customers pricing certainty” when trade policy is changing so much, said James Hasselbeck, chief operating officer at New England-based solar company ReVision Energy.

Solar has gotten significantly more affordable in recent years as the technology scales up, improves and gets cheaper to install. Systems can still cost thousands of dollars on average, but the average cost for a residential system is down more than 70% from 2010, according to the National Renewable Energy Laboratory. American consumers have also had a shot at credits that bring the cost down still further, although the future of those is uncertain under the Trump administration.

Commercial and utility-scale project costs have also dropped dramatically.

That's fed rapid growth across the U.S. over the past two decades. In 2024, the commercial segment grew 8% and utility grew 33%, according to an annual report from the association and consultancy Wood Mackenzie. The residential segment fell 32% last year, but experts attribute that to high interest rates and election uncertainty, and said they had expected continued growth before the tariffs hit.

Solar is an important source of clean energy because it doesn't emit the harmful greenhouse gases that coal, natural gas and oil do. Those are massive contributors to Earth's warming.

Trump imposed tariffs during his first term on imported solar cells and modules in 2018 in hopes of slashing reliance on China.

But China subsidized its own domestic overproduction and some U.S. manufacturers accused it of essentially moving operations to four Southeast Asian countries that had a temporary exemption from tariffs.

Abigail Ross Hopper, president and CEO of the Solar Energy Industries Association, said the U.S. is “quickly taking back control of the supply chain from China to build the strongest solar manufacturing base in the world.” The group reported that in 2024, module manufacturing capacity, largely concentrated in the South, grew 190%, and said cell manufacturing “was reshored for the first time in five years” with company Suniva restarting production.

But Hopper also said sudden changes in policy risk chilling investment and slowing job creation, especially for manufacturers. The group said during the first Trump administration that tariffs issued then were harmful to the industry.

Ultimately, Abramson said she “would encourage anybody who has been really thinking about putting solar on their roof to really look into locking that in sooner rather than later.”

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Read more of AP's climate coverage at http://www.apnews.com/climate-and-environment.

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Alexa St. John is an Associated Press climate reporter. Follow her on X: @alexa_stjohn. Reach her at ast.john@ap.org.

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The Associated Press' climate and environmental coverage receives financial support from multiple private foundations. AP is solely responsible for all content. Find AP's standards for working with philanthropies, a list of supporters and funded coverage areas at AP.org.

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