From tariff rate increases and the final Southeast Asia Anti-Dumping and Countervailing Duty (AD/CVD) determination to threats of new tariffs from the incoming presidential administration, the solar and storage industries face many supply chain and policy uncertainties in 2025. What are the key areas of concern to be aware of as you plan your development and procurement product strategies? How do you find quality equipment from suppliers with a protected supply chain?
Here’s a quick overview of what you need to know as we start the year.
Section 201 and 301 Tariffs
The most pressing market concern right now is tariff changes, including increases, new tariff additions, or exclusion removals that could be implemented shortly after the change in presidential administration.
In 2024, the U.S. government reinstated duties on bifacial modules tariffed at 14.25% under Section 201, affecting modules whose cells do not originate from an exempt country. Currently, the best option to mitigate risk is to purchase cells manufactured from one of the exempt countries (Canada, Cambodia, Jordan, Indonesia) or to purchase cells made in the U.S. However, that advice may not be applicable for long.
There is a substantial risk that Trump could increase Section 201 tariff rates shortly after taking office and/or remove existing solar tariff exemptions. Countries such as Indonesia, which are currently exempt from Section 201 solar tariffs and are attractive, low-risk options for module buyers, may be hit with the 14.25% tariff. If these exemptions are removed, there will be no international tariff-free module options available. Furthermore, the Section 201 tariff rate may be increased; it was originally set at 30% by Trump in 2018.
Changes to Section 301 tariffs are also at the top of buyers’ minds, particularly for the BESS market. With an increase already set to raise BESS tariffs on lithium-ion non-EV batteries imported from China from 7.5% to 25% in 2026, some buyers have accelerated plans to purchase and clear Customs before January 1, 2026, to avoid the increase. In addition to this strategy, other methods to mitigate Section 301 risk include purchasing non-Chinese or domestically manufactured products. However, domestic content can be challenging to obtain, given the currently limited number of options for domestic cells.
As with Section 201 tariffs, the current guidance to mitigate risk for Section 301 tariffs may also change very soon. Experts are most closely watching for a rapid increase to Section 301 tariffs (to rates upwards of 60%) on a faster timeline than the increase to a 25% BESS tariff rate in 2026 previously announced. With a BESS market still heavily reliant upon imported products to meet demand while domestic content manufacturing ramps up, it could become a race to secure supply.
Southeast Asia AD/CVD Case
While we will not know Commerce’s final AD/CVD case determination until Q2, the market is already in flux after the preliminary CVD and AD rates were announced in Q4 2024. Preliminary AD rates, in particular, were much higher than anticipated, with several well-known suppliers, including Trina Solar Thailand, Canadian Solar, Runergy, Boviet Solar Technology, JA Solar Vietnam, and Jinko Solar Vietnam, receiving cash deposit rates between 50% and 80%.
Along with preliminary rates, Commerce issued a partial affirmative determination of critical circumstances. For those manufacturers or countries found to have critical circumstances, duties may be applied retroactively 90 days before the affirmative finding is published in the Federal Register. Critical circumstances were found for all manufacturers in Thailand and Vietnam (excluding the mandatory respondents Trina Solar, Boviet Solar, and JA Solar) in the CVD case and for all Thai exporters and Vietnamese exporters (excluding mandatory respondents JA Solar and Jinko Solar) in the AD case.
With the combined preliminary AD/CVD rates much higher than the 25-50% experts anticipated, prices have started increasing, and the market is continuing to adjust. Suppliers are moving to focus on cells from countries not currently subject to tariffs to avoid being hit with these high rates. A primary concern for buyers is the threat of retroactively applied duties on projects dating back to July 2024 due to the preliminary finding of critical circumstances. However, there is still a glimmer of hope that this may not come to fruition. If either Commerce or the ITC does not find critical circumstances in their final determinations due in April and June, respectively, the retroactive duties will no longer apply. This could be a lifesaver to many buyers with less-than-ideal contract terms that are on the hook for any retroactive duties.
While we anxiously await the final determinations, current guidance to reduce AD/CVD risk includes 1) Ordering a bill of materials (BOM) that uses cells manufactured outside of the four countries named in the case – Cambodia, Malaysia, Thailand, and Vietnam – and China or 2) Purchasing cells made in the U.S. or 3) negotiating protections in the terms and conditions.
Other risks to watch for and how Anza can help
In addition to the risk factors above, our experts are keeping an eye on several other areas of concern that could impact the market, including:
- Tariff increases through the use of the International Emergency Economic Powers Act (IEEPA)
- New AD/CVD cases, potentially targeting countries such as India, Indonesia, and Laos, which are currently attractive options for cell manufacturing to avoid existing tariffs
- The new graphite (battery anode materials) AD/CVD case filed against China in December could also cause road bumps for the BESS market as over 85% of graphite supply is based in China
- Increased UFLPA scrutiny, with more requirements for solar and storage imports linked to China or new additions to the UFLPA Entities list
- Revised IRA implementation guidance or reform, including changes to the base ITC or domestic content adder
- New 45X manufacturing tax incentive limitations, mainly focused on companies linked to China
While it’s not likely that all of the concerns listed above will come to fruition in Q1 of this year (or at all), getting access to accurate information quickly in a rapidly changing market will be vital to make the best financial and risk mitigation choices for your projects in 2025 and beyond. With all of these risk factors in play, it can feel overwhelming if you aren’t confident that the suppliers you are working with have a supply chain insulated from as much risk as possible.
Luckily, Anza is here to help.
While market analysts and consultants may try to predict how pricing will shift due to tariff and policy changes, only Anza has real-time direct-from-supplier pricing for over 95% of the U.S. vendor landscape. With access to the latest market intelligence in the Anza platform – including 1,000+ list price updates per month – you can see how pricing shifts as solar and BESS suppliers react to proposed changes. Our solar platform also provides instant access to module supply chain risk data covering UFLPA, China and SEA AD/CVD, Section 201 & 301, and domestic content so that you can find the best option available for your project and company.
Additionally, with Anza’s services, you can always have the latest policy and supply chain intel and our support to ensure your decisions and projects best mitigate risk. For example, some suppliers in countries currently safe from tariffs have agreed to take on risks from future policy changes to help reduce uncertainty regarding purchases in the near term. Other manufacturers can offer refundable deposits or have inventory already imported and available for sale. With Anza’s support in shortlist optimization, the best and final process, and contract negotiations, you can benefit from our deep supplier expertise and market understanding to achieve the most optimal deal and terms and avoid unnecessary supply chain risks.
Even if policies don’t change early on in 2025, ensuring you have a good strategy in place now will help you sleep better at night without worrying about what may lie ahead. Talk with us to learn more about how our software and services can help you find the best price and terms while mitigating risk.
Interested in an in-depth recap of preliminary CVD and AD rates announced in Q4 2024, outlining ways to mitigate risk moving forward? Download for free below:
