Tariffs spell harm to U.S. solar and energy storage industries

AI generated summary

A recent report by Wood Mackenzie highlights the detrimental effects of potential tariffs on the U.S. solar and energy storage industries, predicting significant cost increases for utility-scale solar development and battery energy storage systems. With the U.S. already facing high costs for utility-scale solar, the report suggests that tariffs could exacerbate this issue, particularly impacting energy storage, which may see costs rise by 12% to over 50% due to reliance on imported battery cells from China.

The analysis outlines two tariff scenarios: a trade tension scenario with a 10% effective tariff rate and a more aggressive trade war scenario with a 30% rate. Under these conditions, the report estimates that utility-scale solar facilities in the U.S. could be 54% more expensive than in Europe and 85% more than in China. The uncertainty surrounding future costs is expected to disrupt project development and increase power purchase agreement prices, posing significant challenges for the U.S. power industry.