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(Bloomberg) -- America’s solar industry has a strategy for dulling US tariffs: hoard.
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Developers have been amassing piles of solar panels for more than a year, in part because of other US levies imposed before President Donald Trump took office in January. The stockpile is now so big that analysts estimate there’s roughly 50 gigawatts worth of the equipment in warehouses. That’s enough panels to power about 8.6 million homes.
The backup inventory will help ease the immediate sting of Trump’s new levies. That’s especially true since so much of the country’s supply comes from Southeast Asia, a part of the world that was hit by some of the highest tariff rates. It’s a small silver lining for US solar developers, who have grappled with the headwinds of previous duties, high interest rates, slow permitting timelines and the risk of tax credits being repealed.
“Having such a high level of inventory does provide some mitigation against the tariff impacts,” Elissa Pierce, a solar module supply chain analyst at Wood Mackenzie, said in an interview.
Of course, there are caveats.
US developers are projected to build about 54 gigawatts of total solar capacity this year, according to BloombergNEF. Much of that will be for big solar farms, but most of what’s in warehouses are panels designed for rooftops.
At the same time, the industry is still facing longstanding duties on China that were extended to some solar exports from Cambodia, Malaysia, Thailand and Vietnam in 2023. About 80% of US solar equipment was imported last year from those four countries, according to BNEF. But even before Trump’s latest move, solar panels and cells imported from parts of Southeast Asia faced levies that could top 200%.
Those tariffs have hit many solar components imported from those four nations since last June. But they also retroactively apply to affected imports between mid-November 2022 and early June 2024 that have not yet been deployed.
Absent deals to slash Trump’s newly ordered levies, those new duties will now be stacked on top of existing levies, adding to costs and whipsawing the industry further. But the supplies in warehouses will avoid the new fees — unlike fresh imports, which will get charged for both. The four Asian countries saw especially high rates in the latest salvo: 49% for Cambodia, 24% for Malaysia, 36% for Thailand and 46% for Vietnam.