Can a solar panel surplus help protect the U.S. solar industry from tariffs?

As the effects of the Trump administration’s tariffs begin to come into focus, the U.S. solar industry may be in better shape than others to weather the incoming trade policy storm. Some solar companies had already begun stockpiling solar panels ahead of Trump’s second term in office, according to a report from Bloomberg, which may now help protect them against the impact of new and higher tariffs. 

The existing stockpile is substantial: Various estimates suggest the stockpile could be as large as 50 gigawatts (GW) of possible solar capacity—the same amount of solar power the U.S. deployed in 2024. Whether this move gives the solar industry the cushion it needs to survive economically turbulent times remains to be seen, but companies that could afford to stash a surplus of inventory may be better positioned than others to withstand the effects of Trump’s new trade policies.

The “Liberation Day” tariffs, which the White House announced in early April, brutally hit Southeast Asian countries, a region that supplies the vast majority of U.S. solar imports. Cambodia was initially slapped with the single highest tariff rate at 49%, followed by 46% tariffs on imports from Vietnam, Thailand (36%), and Malaysia (24%). 

After stock indexes plunged, Trump issued a 90-day pause on all “reciprocal” tariffs except for China, which now faces a tariff rate of 145%. Meanwhile, a baseline 10% tariff remains in place for most other trade partners.

In addition to the Trump tariffs, the U.S. Department of Commerce recently announced anti-dumping and countervailing duties (AD/CVD) as high as 3,521% on Southeast Asian solar imports following a yearlong trade probe. The tariff rates vary by country and manufacturer and haven’t been finalized yet. The International Trade Commission (ITC) will vote on whether to approve the probe’s findings in June for the tariffs to take effect. 

The push to help grow and protect U.S. solar manufacturing, especially through tariffs, isn’t necessarily an unreasonable strategy, some industry insiders told EnergySage. 

“The problem isn't the tariffs, the problem is the fear of the tariffs, and the unknown of it all,” said Tony Lostracco, CEO of Public Service Solar, a solar installation company based out of New Jersey. Lonstracco emphasizes that historically, anti-dumping tariffs were “more uniform and structured,” and were needed to stabilize and regulate the industry, as the dumping of panels “made solar a gold rush” and ripe for “nefarious practices.” 

Lostracco said he thinks the problem with the current tariffs is the “whiplash effect,” which makes it difficult for solar manufacturers and distributors to predict costs. This leads to price uncertainty and gouging and hurts both local installers and solar shoppers.

Neel Desai, CEO of Sunrgy, a solar distributor in Texas, said that distributors are “already starting to see signs of the manufacturers raising costs” and “are stopping or delaying their shipments to the U. S.,” in favor of “rerouting shipments to other countries where there are no tariffs.” Desai predicts that “supply constraints are imminent,” which he sees happening in the latter half of the year, and that solar installers will soon see “high fluctuations in their pricing from distributors.”

Desai also anticipates that the lack of supply “will drive companies towards trying to acquire domestic product.” However, due to low domestic solar module production capacity, there’s “going to be a big fight for product.” 

This all depends on solar demand, of course. Price increases could result in a decrease in demand for solar installations, which would ease supply constraints. Desai said he could see demand “dropping up to 20%” this year.

Still, Desai also sees some benefit to the tariffs. While they certainly cause “short-term headwinds and complications,” he recognizes the value of “re-stabilizing the manufacturing of a product more domestically.” Desai said that U.S. companies are required to “provide a certain level of quality to the end consumer” as they must abide by specific “insurances and regulations that ensure the quality of the product.”

While the solar industry knew tariffs were coming, most companies didn’t have the funds to finance a pre-tariff shopping spree.

“More large organizations are trying to stockpile, but small and medium-sized businesses don't have the current liquidity to do that, so they're unable to hedge their bets against these tariffs as they're implemented,” said Desai. 

Most local installers typically buy “just-in-time inventory” for their solar projects, said Lostracco, who suggests it's the “conglomerates that are warehousing” panels, referring to Sunova, Sunrun, and other big players in the industry.

“These big bank-backed brands have unlimited money. And they’re the ones that are sucking up all the residential stuff,” Lostracco said.

On the distributor side, Desai said his company took a conservative approach to stockpiling because, “if the legislation changes, specifically, the IRA or the ITC under the Trump administration, and the capital markets and lending facilitators require domestic content, that will change our whole outlook and purchasing strategy.” 

According to Desai, financiers and lenders also sought to stockpile panels on behalf of installers. “We're seeing these financing organizations buying up material because they're realizing that smaller companies do not have the capital to do so.” 

For the solar companies that did rush to bring in goods ahead of the tariffs, that buying boom is over. U.S. businesses are now figuring out their next steps forward as duties take hold and they look to purchasing more domestic content.

China still accounts for most U.S. lithium-ion battery imports, controlling 80% of global lithium chemical production. As the U.S.-China trade war ​​escalates, Trump has imposed a 145% tariff on Chinese-made grid batteries, which is already impacting battery storage businesses, including Tesla, which was the most popular battery brand in 2024, according to the latest EnergySage Marketplace Report. 

The recent tariffs will make solar batteries more expensive for shoppers and raise construction costs for domestic battery producers. Energy storage deployment in the U.S., which was on course for rapid growth in 2025, is forecasted to slow, and is now unlikely to reach its projection of 18 gigawatts of new battery storage capacity.

Solar companies are accustomed to high tariffs on imported solar panels, and thanks to stockpiled inventories, the effects of Trump’s tariffs might be more minimal than expected. The solar industry’s supply chains have been a hot button topic of U.S. trade policy for years, which has made the sector more resilient in the face of tariff probes, potential tax incentive repeals, and policy changes. 

Most of the excess inventory is for rooftop solar, meaning there’s still a window for homeowners to go solar without the costs imposed by tariffs to be passed along to them, according to Bloomberg.

While Customs and Border Protection has promised to strictly enforce AD/CVD orders on imports from China and Southeast Asia to prevent stockpiling, some companies are avoiding tariffs by moving production onshore, or to countries that aren’t on the anti-dumping or countervailing tax lists, such as Laos, India, and Indonesia. For now, the solar industry remains in a “wait and see” period until the current stockpile is depleted.