The renewable energy sector in the US is bracing for impact as President Donald Trump’s new tariffs on electrical components, battery storage, and other equipment from China, Southeast Asia, and Europe threaten to disrupt supply chains and inflate costs. Executives are sounding the alarm, warning that these tariffs could lead to higher electricity bills for consumers and stifle the industry’s growth, just as the US aims to assert its dominance in clean energy and AI technology.
The tariffs, ranging from 10% to 49%, come at a time when electricity prices are already rising at twice the rate of inflation, according to the Bank of America. Utilities are seeking double-digit price hikes to cover increasing costs, and these new tariffs could exacerbate the issue. Sandhya Ganapathy, chief executive of EDP Renewables North America, expressed concern that the tariffs could “de-rail” the US’s ambitions to lead in energy and technology, creating disruption and uncertainty.
The Inflation Reduction Act (IRA) and Chips and Science Act, passed under former President Joe Biden, aimed to boost domestic manufacturing through substantial tax credits. Over 200 large-scale manufacturing projects have been launched since then, but many are yet to start production. Trump has pledged to dismantle the IRA, referring to it as a “green new scam,” and has prioritised fossil fuel initiatives over renewable projects. This shift has dampened investment in the green energy sector, which is already grappling with increased costs due to tariffs.
Battery storage, vital for renewable energy, is particularly vulnerable. In 2024, over 90% of lithium-ion energy storage cells used in the US came from China, according to data research company Rho Motion. Despite efforts to boost domestic production, the US lacks the capacity to meet demand. Chinese storage cell imports now face an additional 34% tariff, on top of the earlier 20% imposed by the Trump administration. By 2026, total duties on Chinese cells could reach 82.4%, including the new Trump tariffs and planned increases announced by the Biden administration.
Ganapathy highlighted the broader impact of these tariffs, stating that they affect not just new projects but also grid stability. “Whether it’s transformers or whether it’s circuit breakers, a lot of them are coming from overseas – Canada or Mexico or other parts of the world,” she said. “And [the imposition of tariffs] not just impacts new projects that we want to put in the ground, it impacts grid stability.”
Meanwhile, other countries are seizing the opportunity presented by US tariff threats. The government of British Columbia in Canada announced in February 2025 that it is fast-tracking 18 mining and energy projects valued at an estimated C$20bn ($13.9bn). These projects include four mines, three natural gas, and 11 renewable energy initiatives, primarily in wind power. This move could attract investment and manufacturing away from the US, further challenging its position in the global renewable energy market.
The tariffs could also spark a wave of innovation and diversification in the US supply chain. Companies may be forced to seek alternative suppliers or invest in domestic manufacturing to avoid the tariffs’ impact. This could lead to a more resilient and self-sufficient renewable energy sector in the long run. However, the immediate effects are likely to be challenging, with increased costs and potential delays to projects.
The renewable energy sector is at a crossroads. The tariffs could either derail the US’s clean energy ambitions or catalyse a new era of innovation and self-sufficiency. The coming months and years will be crucial in determining which path the industry takes. As Ganapathy put it, the tariffs create “disruption,” but they also present an opportunity for the US to rethink its approach to energy and technology. The world will be watching to see how the US navigates this challenge and shapes the future of its renewable energy sector.
