Trump solar tariffs test affordability gap

President Donald Trump has ordered a new layer of trade protection for the US solar supply chain, imposing tariffs and minimum import prices designed to favour domestic manufacturing while raising the prospect of higher costs for developers and households adopting solar power.

The measures place a 15% tariff on imported polysilicon and products derived from it, alongside minimum prices covering key stages of crystalline-silicon solar manufacturing. The price floors are $21 per kilogram for polysilicon, $100 per kilogram for ingots and wafers, 22 cents per watt for solar cells and 38 cents per watt for modules. They are scheduled to take effect on December 4.

The White House is presenting the action as an industrial and national-security policy aimed at reducing dependence on China, which dominates much of the global photovoltaic supply chain. Polysilicon is also an important material for semiconductor production, allowing the administration to link solar manufacturing with its wider drive to secure supplies considered strategically important to artificial intelligence, advanced computing and energy infrastructure.

The policy could provide significant protection for producers including Hemlock Semiconductor in Michigan and Wacker Chemie’s operation in Tennessee. Solar manufacturers expanding US factories have also welcomed measures that make low-priced imports less able to undercut domestic production. Shares of several US-focused solar companies rose following the announcement, reflecting expectations that higher import barriers could improve the economics of local manufacturing.

America’s solar factory base has expanded sharply. Module manufacturing capacity reached about 65.5 gigawatts by the end of 2025, up from 42.5 GW a year earlier. Cell manufacturing has expanded and domestic wafer production has returned after an absence of nearly a decade. Actual factory output, however, remains considerably below domestic demand, leaving developers dependent on imported equipment while new plants ramp production.

That imbalance creates the central risk in Trump’s strategy. Trade barriers can encourage companies to build factories, but they can also raise equipment prices before domestic suppliers have enough capacity to replace imports. Developers working on utility projects operate on narrow cost assumptions, while residential customers face installation prices that include financing, labour, permitting, sales and hardware expenses. Even relatively modest increases in module costs can therefore affect project economics.

The impact could be uneven. Wealthier homeowners can more readily absorb higher upfront costs or finance rooftop systems, while lower-income households are more sensitive to installation prices and borrowing costs. Research into US solar adoption has already found substantial demographic disparities, with lower-income neighbourhoods having fewer installations despite strong potential for reducing emissions through rooftop generation.

Community solar has been one mechanism for narrowing that divide because customers can participate without owning suitable roofs or financing complete household systems. Academic modelling has found that rooftop and community solar tend to attract households from different income groups, making community projects important when governments seek broader adoption across economically diverse populations.

Any increase in component costs could consequently have different consequences across the market. Large utilities can negotiate bulk purchases and spread higher equipment expenses across sizeable projects. Homeowners, small businesses and community projects have less room to absorb price increases. Developers may also delay installations while waiting for domestic supply to expand or equipment prices to stabilise.

The stakes are substantial because solar has become the largest source of new US electricity-generating capacity. The industry installed 43.2 GW during 2025 despite a 14% annual decline, and solar accounted for 54% of all new generating capacity added that year. Solar and battery storage together represented 79% of additions.

Trump’s policy also represents an intensified use of trade rules to reshape clean-technology supply chains. Washington has already imposed tariffs on Chinese solar modules, cells, wafers and polysilicon, while anti-dumping and countervailing duties have affected supplies routed through Southeast Asia. The administration is now combining tariffs with minimum import prices, making it harder for overseas producers to maintain market share through aggressive price reductions.