The Impact of Trump's Tariffs on Renewable Energy

How have President Trump's tariff policies impacted the renewable energy industry? What does the dismantling of the Inflation Reduction Act mean for the future of American renewables manufacturing? In this discussion, Vice President of Renewables Anne McBroom and Project Engineering Manager Frances Plourde discuss the renewable energy industry's unique susceptibility to tariff fluctuations, as well as the long-term implications to domestic renewables manufacturing and job forecasts created by tariffs on renewables equipment.

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Transcript

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Welcome to Power Bank, sponsored by NACE Renewables, where big ideas, bold conversations, and unstoppable energy collide. We're your hosts, Ann mc Broome and Francis ppl, and we're diving headfirst into everything you need to know, want to hear, and can't stop talking about in renewable energy. Let's get into it. Welcome to the Power Bank Podcast, sponsored by NACE Renewables. My name's Frances Flord and I'm here today with Anne McBroom. Today we're going to discuss a very pertinent topic to us presently in the United States, which is the impact. Of federal tariffs on the renewable energy industry. This is something that we are presently facing a lot of discussion and uncertainty because of the Trump administration's hard stance on tariffs and decision to enact stronger tariffs with some of America's trading partners and some of these trading partners form the backbone of the global renewable menu. Manufacturing industry. So this is something that has the potential to significantly impact the production and use of renewable energy in the United States. And so it's something that we at NACE, renewables are keeping a very close eye on. To give a little bit of context as to the overall impact of this. As we're recording this, we're only in late June of 2025, but already we've seen an estimated$14 billion worth of renewable energy projects being canceled so far this year just because of the market uncertainty and the additional concern that tariffs create for renewable energy investors and manufacturers. So this is already having an immense impact on our industry, even though we're relatively early into the second Trump administration. Just a little bit of context for those who may not be following the news quite as closely. President Trump has repeatedly stress the importance of increasing tariffs with American trading Partners in order to spur on more American purchasing and manufacturing development. These tariffs effectively function as import taxes where the cost of goods produced outside of the United States is raised by a certain percentage with the intention of increasing desire for American made goods. the reason why the renewable energy industry is particularly susceptible to international. Tariffs is because the vast majority of material and equipment used to generate renewable energy in the United States is actually produced overseas. Anne McBroom has extensive experience in the renewable energy industry, specifically in the solar photovoltaic and the wind industries, and she saw firsthand how Trump's tariffs during his first administration deeply impacted the wind industry. Anne, can you give us a little bit of a taste of what that experience was like? During the first Trump administration, I. I can do that, but I want to preface anything I have to say with creating an understanding of how the current administration has been able to move forward with their decisions in implementing tariffs. So there was a trade expansion act in 1962, and this act allows a US president to investigate and adjust imports that threaten national security. The sections that are most. Concerning are sections 2 32, and the other one is section 3 0 1, 3 0 1 impacts solar and clean energy tariffs, and 2 32 is specific to steel and aluminum. And why this impacted us the first time around is when we construct wind forms we use. An exorbitant amount of material that is made from steel and aluminum. And when there's hairy tariffs on these materials, it impacts the ability to move forward with the construction on these facilities because the investors lay out initial funds for these facilities. And once the budgets are created and. The projects move forward when tariffs are implemented and these items have not been procured and are on US soil. The tariffs are implemented. Whether the project was budgeted long before or currently the tariffs are applied to these procurement items and we have had numerous instances in my career during the various administrations where tariffs or there were issues with other nations that were providing these procured items. That caused them to sit in harbor. When we had this happen several years ago in Trump's first administration, we wound up with hundreds of millions of dollars in losses in projects in the wind industry, and it was as significant in the solar industry. I had counterparts that had panels modules in port or in customs for a year or more. Because of tariffs and a lot of the other issues that surrounded procuring these items from nations that were not under the permitted procurement packages. as we go forward in this second round of tariffs in the current administration, we're looking at tariffs on solar components, which are cells and wafers and polys, silicone, I. Batteries, EV parts, wind components. There's just so much more. Any Chinese solar parts are going to be marked up in, in the triple digit percentages and anything from Southeast Asia, we're looking at double digit percentages. These are not set in stone, but that's where we're headed. And then couple that with these aluminum and steel tariffs, which are also double digit percentages. That, that we're expecting under this section 2 32. I understand that it's aimed toward bolstering us domestic metal production. But in the past, when these tariffs have been implemented, it really didn't increase US domestic. Metal production because the economy wound up in stagflation and we really didn't recover for, from it for almost a decade. And we finally recovered and we have this very strong economy in the renewable space. And now here we are with these potential major setbacks. It's concerning. And to protect domestic manufacturing and reduce strategic dependency on China, this is a global economy. This is not 1920. We rely on each other to some degree and tariffs are part of the game, but to implement tariffs to this degree is going to cripple the renewable industry. It's unquestionable, at least in the United States. It will impact Europe and we can get into that later, but the US will be significantly impacted in the renewable space. Definitely, and I think we're already starting to see that. As I said, we're only recording this less than six months into this new administration, and we've already seen vast amounts of new projects completely scrapped and canceled because solar. And wind developers aren't willing to spend money on projects that they can't ensure will be able to be completed, that they can't ensure they will be able to obtain the equipment and the infrastructure needed to build the projects to maintain them. Just in Texas alone, and Texas has risen in the last five to 10 years as one of the giants of solar installation in the United States. There's been an estimated four gigawatts of. Battery energy storage system projects, and an estimated three and a half gigawatts of solar projects canceled just this spring alone, just in April and May. That is a trend that is disturbingly looking to be the new normal within our industry. For understandable reasons, you're not going to want to continue to build and develop projects that you don't know if you're gonna be able to sustain. One of the reasons why renewables is so susceptible to tariffs is because of the fact that so much of renewable equipment and infrastructure is not produced in the US presently. Roughly 96% of photovoltaic modules produced worldwide are produced in Asia. 80% of those are coming from China. And China itself controls 95% of the market for the production of silicon ingots and wafers, which are the primary. Photovoltaic component of Silicon PD modules. Obviously China is one of the key targets of the Trump administration's tariffs, and so any tariffs that are specifically impacting China will significantly increase the cost of Chinese made products, such as just the silicon itself, the raw component of the photovoltaic modules as well as the finished modules themselves. Within the last few decades, we have seen an increase in solar module production in other countries. But again, most of these are located in Southeast Asia. So many of these countries are also under. Significant tariffs. Maybe not as strong as those of the Chinese modules, but very similar. We have seen recently some increase in photovoltaic module production here in the United States. The first of these was first Solar creating cadmium Telluride modules out of their factory located in Ohio. There have been several other module manufacturers that have built new manufacturing centers in the United States, and this was primarily spurred on by the Inflation Reduction Act. The Inflation Reduction Act included tax credits and other financial incentives to build additional renewable energy manufacturing centers here in the United States. I live in Arizona and Meyer Berger, the photovoltaic manufacturer, had actually intended on building a manufacturing center here in Phoenix which ended up being recently scrapped due to several different reasons. There has been an increased push in trying to develop a homegrown domestic, renewable energy manufacturing market. But these things take time and these things take energy. And it's not like you can just build a photovoltaic plant or a best factory from scratch. They take a lot of investment with the promise of return. And especially since Trump has also set his sights on scrapping many portions of the inflation reduction Act. It's unclear whether any of those incentives to continue increasing the domestic manufacturing capacity for renewable energy products will even be able to continue. So we end up with a situation where the equipment is more expensive to produce overseas, combined with not being able to produce them at home. Let's add to Trump's tariff regime from metals to components, right? This was driven by America first and it's a manufacturing narrative. While it did stimulate some domestic capacity the last time around in solar cell manufacturing, the overall impact on the clean energy transition was negative. Consumer costs rose. It slowed adopting residential and utility markets, clean energy jobs were lost. And I was one of those, I had to transition at the time. And that wasn't the first time in 2011, Xcel Energy pulled the rebates and we had some issues back then too, and it took us. Five to seven years, I believe it was seven years to get our footing back in renewables, and then we were full speed ahead. It was incredible. It's been an incredible decade. Investor confidence, it wanes in renewables. People think, oh, we just, we don't need that. And it triggers billions installed projects, which is what we're seeing now. emission benefits were fleeting. We didn't see what was to be expected. And it overshadowed a broader strategic setbacks. Recently I was in Amsterdam and I listened to Jan Rotmans speak about how emissions will no longer. See that the path toward net zero due to the us new policies to implement tariffs, he indicates that we are looking at a reversal of at least 20% in the emissions benefits that we've seen over the last. Decade. And that's scary. It goes to show that this decision doesn't just impact the us. This is impacting our world. And if we don't find a way to correct this momentum and move back toward our goal of net zero by 2030 all the strides we've made were really in vain. Because we were really trying to have. Upgrades to our grid our grid is failing. And these tariffs are going to impact that as well. It's going to impact us on a grand scale and these policy uncertainties, these fluctuating tariffs. The threats to Biden's IRA, which is the Inflation Reduction Act funding that's been set aside. as Francis stated, we've lost$14 billion in planned projects. Now on, on the grand scale. That isn't a lot of money, but it's just only begun. And can we imagine how much we'll see? In project, funding removed from the renewable space, I can't imagine what that's going to look like and it really impacts me personally because I've dedicated the last 20 years of my life to a goal of net zero and doing everything I possibly can to make this earth better than for my children than it was during my lifetime. And this, it's just so disheartening to, to see where we're headed based on the tariffs and the big beautiful bill reconciliation bill. The implications of that as well, I. Yeah, it will be very interesting to see how the reconciliation bill that as we're recording, is still presently being debated by Congress. How this will impact the renewable industry specifically as it relates to the inflation reduction Act. So as we mentioned before, the Inflation reduction Act was in part, intended to. Spur on further domestic investment and manufacturing of renewables and it's been estimated that up to 85 of the additional renewable manufacturing that the Inflation Reduction Act has helped create within the United States, actually occurred within Republican congressional districts. So renewable energy in the United States has ceased in many cases to be a partisan topic, especially as we're seeing solar. And best systems move into historically Republican states such as Texas. We're seeing investors and politicians from both sides of the political aisle come together to support additional renewables, installation and manufacturing. Because we've seen that investment in renewable energy supports good jobs, good American jobs on the installation, the maintenance side, and the manufacturing side as well. And that's something that I think everybody from any political affiliation can see and support. So it'll be very interesting to see how many Republicans in Congress react to dismantling the IRA, if indeed it does succeed in dismantling American manufacturing of renewable energy products and reduce installation of renewable energy here in the us. Again, there's so much that is still up in the air that we have yet to see how it will fully unfold, but. We're in a very interesting climate politically as well as within the energy industry where this has ceased to be simply a Democrat versus Republican issue when we have so much bipartisan support for renewable energy here in the United States. And, as I discussed earlier, there, there will be a short term emission dip. So some climate models show temporary CO2 reductions due to slowed trade, but longer run costs like clean tech delays, reliance on fossil fuels. Economic drag vastly outweigh this marginal gain. Comparatively the global stance while the US pursued tariff protections, the EU considered carbon border tariffs and China continued clean tech scaling. So experts argue us trade actions could erode domestic leadership in green innovation, and that's something that we just don't want to see. We don't wanna see this reversal and we don't want to ostracize ourselves from the initiatives that are occurring worldwide. And that was one of the things that I learned in Amsterdam was China is the leader in solar facility installations in the world. I had no clue. I thought that they were. Actually polluting the planet more than any other nation. But apparently that wasn't the case. They're trying to reverse some of that in some of those emissions with these solar facilities. And by utilizing less. Fossil fuels. So I thought that was really interesting to learn from John Rockman's speech. And when we start looking at these broader initiatives worldwide, and here the US is taking a step back, it makes one wonder why we would put so much into something and then just step away from it in the name of policy Actually, it isn't even in the name of anything. It's just the administration saying, we want to reduce strategic dependency on China. It's not nonsensical to me. It'll be very interesting to see if individual states start stepping up and creating direct trade relationships with China or with other countries. I know Gavin Newsom, the governor of California, has suggested at the height of the tariff uncertainty. With China, that California would create a direct trade relationship with China in the hopes of bypassing federal tariffs. Again, there's questions on whether that's possible or whether that's something that even they would wanna pursue at this stage. Now that some of the initial tariff panic has calmed down, but especially states such as California or Texas, as we've mentioned. That have so much to lose with a waning renewable energy industry if they will either force their representatives in Congress to continue to fight for their renewable jobs within their states, or if they will take matters into their own hands and try to either spur on additional domestic manufacturing within their own state, at the state level, rather than at the federal level, or if they'll work to create direct international partnerships as well. Again, there's so many aspects of this issue that I feel like we're at the very front of that within five to 10 years, we'll be able to see better what the long-term impacts of this are, both economically in terms of our industry, as well as with the climate, as you said, with our emissions. What this will mean for our. CO2 emissions, and specifically the states and the areas of the United States that have set very strategic goals for reducing CO2 emissions. So the context of most of what this discussion has been focusing on has been on the development of new projects because that's where the direct impact of tariffs is usually felt, at least initially. And these$14 billion worth of new projects that have been canceled so far are because companies don't want to take on initial. Investments in projects that they can't make sure that they can complete. Here at NACE Renewables we tend to focus more on the post construction side. So we are in operation and maintenance as well as special projects working to troubleshoot issues that are found on existing sites. Our focus is more on managing distressed assets, making sure existing solar and best systems run effectively and safely. And so I'm very interested to see how these tariffs potentially impact our side of that work. The main thing that I can think of is it will make replacement parts more expensive and more difficult to find. You can refer to our earlier podcasts on module replacements and connector mismatch for a few of the pieces of equipment that are specifically susceptible to tariffs. But I think we're gonna find it a lot harder to find replacement modules, especially smaller replacement modules and connectors in the right type, depending on where that connector was manufactured. What country did it come from, what is the tariff on that product? Are people willing to buy and sell that product anymore because of the higher tariffs? So that's an area where I think the tariffs are directly impacting our sphere of work. And I'm also interested to see overall what the impact is on the total cost per kilowatt hour of of renewable energy compared to other conventional energy sources. Because of the vast and rapid increase in the utilization of renewable energy in the United States, renewable energy sources such as solar have become cheaper energy sources than other conventional methods such as coal. It'll definitely take a while to see the direct impacts of tariffs on cost of electricity because electricity costs depend on a myriad of other factors, but especially as we're seeing the overall cost of renewable energy equipment rise, it's fair to say that the levelized cost of energy will rise as well for solar and best. Systems and wind as well compared to conventional power. Several of the tariffs that we've discussed today do have the potential to impact, conventional power as well. So that includes natural gas, oil, coal. Thereby no means unaffected by tariffs, but their direct impact due to the tariffs isn't as obvious as that of renewables since much of that manufacturing occurs within the United States and so won't be affected as drastically by tariffs. This is just a very fascinating time to be working in our industry and to be addressing all of these issues that we now have to incorporate into our thought process as we approach projects. It just creates an additional level of consideration that we at NACE, renewables feel uniquely equipped to address, especially since we have industry professionals like Anne who have weathered storms like this before in the industry and so it's definitely gonna be a pretty chaotic time, but we are more than up for the challenge. I wanted to include the fact that according to Energy Sage, which creates a lot of the statistics for the renewable space, they state that the cost per watt rose in 2024. Five from the tariffs to 15 cents a wat. And that's significant when you're dealing with a facility that has, 20, 30, 40, 50,000 modules on a facility. So that's a significant increase so far. I think the impact's going to be far greater than they realize. ERCOT has been absolutely our favorite to deal with. They have been accommodating. The compliance, just everything across the board has been a pleasure to do business, in Ercot. And, I don't think texans realize what the impact will be if the inflation reduction act is scaled back or eliminated completely. Absolutely. I remember reading a statistic that this has been the worst quarter for Ercot since. The ice storm of 2021, that took out a significant portion of Texas's electrical grid. So absolutely this is gonna have a huge impact on Texas, and I think the reason why Texas stands out as a particular victim of this tariff uncertainty is because. Obviously there are many other states such as California, that have historically had more photovoltaic or other renewable energy installation, but a lot of that is older. There's still installation going on in California, but it's not increasing at the rate at which it has been in Texas recently. Obviously Texas is significantly cheaper to do business in than California. There's less. There's fewer state regulations, and so the rapid increase in solar Bess and wind installation in the United States has primarily focused on Texas within the last five to 10 years, and so they're going to be a. Particularly susceptible to this because they've had this historic increase in renewables investment within the last several years. So it'll be very interesting to see what that does to the Texas economy in terms of impacting jobs. I think that's gonna be the first thing we're going to start seeing is potentials of job losses and layoffs due to these cancellation of these projects because they're not going to need nearly as many people to install and maintain these projects. And then we're going to see the economic impact of that as well. Just the economic impact of job loss, but also the loss of that available electricity and that energy. And as I mentioned before, ERCOT suffered that disastrous blackout due to the terrible ice storms in early 2021 that left millions without power, and I think they're definitely worried about a similar issue repeating, and the consideration that renewable energy could potentially be used to prevent something like that will hopefully continue to spur on additional renewable energy development regardless of what the status of the tariffs is. Excellent point. All I can say is if the goal is to foster long-term clean tech leadership, a more effective approach, would pair selective domestic manufacturing support with stable incentive driven policies, not blink tariffs in isolation. Absolutely. Well, thank you so much for joining us today on the Power Bank Podcast, sponsored by NACE Renewables. If you have any questions about what we discuss today, please reach out to us at Power bank@nace.com and we'd be very excited to speak with you. Thank you so much for joining us on today's episode of The Power Bank, sponsored by NACE Renewables. If you have any questions regarding the topic of our discussion today, or you would like to reach out to us about special projects for photovoltaic sites, we would absolutely love to talk with you. You can send us an email at Power bank@nace.com. Thank you and keep powering on.