Rehaan Aleem Shiledar unpacks the impact of regulation on the clean energy landscape in the US
Donald Trump’s victory to the presidency has marked a significant setback to the renewable energy sector, both symbolically and materially. His administration’s policies and rhetoric signaled a clear departure from the trajectory toward decarbonization that had begun to take shape under the previous leadership. Trump’s executive orders have restricted the growth of renewables, especially for offshore wind power in the US. The temporary suspension of new federal offshore wind leasing, coupled with a comprehensive review of the existing projects and permits, has been regarded as a major setback for the US offshore wind industry. Moreover, Trump’s One Big Beautiful Bill Act (OBBBA) has further narrowed the window for full-value tax credit eligibility for wind and solar projects, requiring placement in service by December 31, 2027. This comprehensive legislation not only introduces new restrictions on renewable power growth but also undermines the economics of solar and wind projects in the US.
While Trump has issued numerous executive orders during his second tenure, it is the tariffs that have taken center stage and caused a severe blow to the global economy. The second presidential tenure witnessed Trump imposing tariffs on nearly all the trading partners including countries like China, Mexico, Canada, Brazil, Japan, India, and the EU. The evolving tariff environment had piled on top of the uncertainties and significantly affected renewable energy, its commodity prices and supply chains.
Tariffs have demonstrated a significant and complex impact on the global renewable energy sector by increasing costs, causing project delays and cancellations, and creating investment uncertainty. While the US’ goal is to stimulate domestic manufacturing, the immediate effect has been a disruption of established supply chains and higher prices for essential components such as solar panels and wind turbines, along with raw materials steel and aluminum, necessary for manufacturing components. Consequently, trade measures have increased the cost of imported inputs, thereby raising overall project expenditures, delaying deployment timelines, and exerting upward pressure on electricity prices.
Impact on the renewables net annual additions
The wind and solar PV industries are facing significant challenges under the Trump administration due to the implementation of policies and tariffs that have increased costs, eliminated financial incentives, and created an uncertain policy environment.
Under the Biden administration, GlobalData estimated the offshore wind net annual additions would reach 1GW in 2025 and would grow to 6.1GW by 2030 prior to Trump winning the elections. With Trump’s policies and tariffs, the offshore wind net annual additions will fall to 0.4GW in 2025 and are estimated to reach only 0.7GW by 2030. With a lesser impact, the onshore wind annual additions are estimated at 10.6GW against the previous estimates of 10.7GW. Likewise, net annual additions for solar PV are expected to fall to 42.7GW by 2030 from the previous forecast of 54.5GW.
Fiscal uncertainty in the wind market
The offshore wind market has been the major target of Trump’s policies and tariffs since it has been hit the hardest amongst all. With the recent 50 percent tariff hike from the previous 25 percent on steel and aluminum, the wind energy capital expenditure (CAPEX) and the levelized cost of energy (LCOE) is likely to be further escalated. For instance, Dominion Energy’s 2.6GW Coastal Virginia offshore wind has been impacted by the tariff hike, wherein the capital cost of the project increased to $11.2 billion from $10.9 billion. Similarly, companies such as Orsted, EDP Renewables, RWE, and Equinor have already expressed concerns regarding tariffs and halting of offshore wind leases.
The US relies on imports of steel and aluminum, including from the EU, to support the construction and operation of offshore wind farms. The cost of aluminum averaged $2,400-to-$2,425 per ton in the EU in 2024, while steel averaged $650-to-$675 per metric ton in 2024. The latest tariff hike by the US on steel and aluminum will have a major impact on trade between the US and the EU. It will affect the steel and aluminum supply required for wind turbines impacting the wind industry. However, the UK remains exempted from the latest tariff hike and will continue to trade at 25 percent tariff for steel and aluminum.
Wind turbine components significantly impacted by retaliatory tariffs encompass generators, gearboxes, and power electronics. Blades, predominantly imported from Mexico, seem to be provisionally protected from these tariffs, as they comply with the United States-Mexico-Canada Agreement (USMCA) standards. Towers and nacelle assemblies, which have the highest levels of domestic production, are likewise largely insulated from the tariffs. The imposition of tariffs has introduced considerable uncertainty into the forecast for the US wind industry. Although the short-term project pipeline remains robust, the escalation in costs and associated risks will decelerate the development of new projects should these policies continue.
Reshaping the US solar supply chain
As the global economy contends with the tariffs conflict initiated by US President Trump, the US solar power industry is poised to experience rising costs. This is
particularly significant given the US’ vertically integrated solar production lacks the economics of scale necessary to mitigate these increases effectively.
2024 witnessed the US importing solar PV modules from Cambodia, Malaysia, Vietnam, and Thailand, valued at $1.4 billion, $2.1 billion, $5.5 billion, and $3.1 billion, respectively. The new anti-dumping and countervailing duties (AD/CVD) on Southeast Asian cells and modules, ranging from 41.08 percent for Malaysia to 660.04 percent for Cambodia, and the threat of several new tariffs are likely to create genuine supply bottlenecks and unprecedented challenges for renewable energy deployment. The AD/CVD investigation finalized in June 2025 on Cambodia, Malaysia, Thailand, and Vietnam have pushed tariff rates on these countries above Chinese levels. Tariff escalation will push these suppliers to reroute the supply chain for the PV modules to other Asian countries and Europe, adjusting their investment and inventory, both. Although domestic manufacturing capacity in the US has seen significant growth, it still lacks sufficient upstream capabilities that will impact the procurement lead time.
Likewise, the inverter market exhibits a marked distinction between the residential and utility-scale sectors. Manufacturers within the residential inverter segment have largely transitioned to domestic production. Conversely, the utility-scale sector remains heavily reliant on imported goods, making it vulnerable to possible price increases that may escalate by up to 30 percent. The US imported solar invertors majorly from China at $2.8 billion, Japan at $1.1 billion, Mexico at $2.5 billion, Vietnam at $1.5 billion, and Thailand at $2.2 billion in 2024, respectively. The imposition of these tariffs is anticipated to increase the costs of US utility-scale solar projects by approximately ten percent, primarily due to a surge of around 30 percent in the prices of modules and inverters. This development is expected to hasten the growth of domestic manufacturing; however, it may concurrently lead to supply limitations and heightened price volatility.
What lies ahead?
The roadmap to renewables deployment in the US seems to progress at a slower pace citing tariffs uproar and policies reversal. Tariffs have driven up the costs of renewable energy projects, disrupted supply chains, hindered new investment, and slowed the clean energy transition both domestically and worldwide by inflating the prices of key components such as solar panels and wind turbines. Although these tariffs are intended to stimulate domestic manufacturing, they have resulted in project delays, heightened uncertainty, and increased expenses for companies dependent on imported parts and materials. The repercussions extend beyond the US, adversely affecting countries that rely on these components and contributing to greater instability in global clean energy markets.
The US has chosen a path of industrial policy ‒ IRA backed by a protectionist trade policy ‒ tariffs. The success of this approach hinges on its ability to rapidly scale its domestic industry to lower costs and ensure supply, and at the same time navigate geopolitical friction without derailing global climate cooperation. The coming years will be a crucial test whether the US can successfully balance being a climate leader and an economic competitor simultaneously.
Rehaan Aleem Shiledar is a Senior Analyst at GlobalData’s Power division. Rehaan is a mechanical engineer by profession with experience in project management of thermal power plants. Rehaan’s research work at GlobalData focuses on the industry reports in power, and expert insights on the ongoing power market trends and consulting projects.