Trump Imposed a Minimum Price on Solar Panel Imports

US President Donald Trump is imposing a new tariff: in addition to a 15% levy on polysilicon components for assembling solar panels, the presidential order sets a minimum import price, which is expected to increase their cost by approximately 40%. The stated goal is to strengthen the US industrial base and reduce dependence on China, the current market leader.

This may serve as a strategic move for trade negotiations with China: the tariff will take effect only in December, following a summit with Chinese President Xi Jinping, who is expected to visit the US in September. In any case, construction costs in the US are expected to rise, affecting Israeli solar developers operating there, as well as electricity prices for consumers.

According to a White House statement, "Polysilicon is the basic material that establishes the security of semiconductor and solar energy supply chains in America. For decades, America has allowed foreign countries to weaken American manufacturers in the polysilicon industry, thereby eroding our economic and national security."

The order includes a 15% tariff on polysilicon products, relevant to both the chip and solar panel industries, and sets a minimum price of 38 cents per watt for solar panels, with corresponding thresholds for upstream components.

These measures were determined under Section 232 of the US Trade Expansion Act, intended to block imports that could harm national security. The US Department of Commerce concluded that polysilicon imports pose such a risk, granting Trump the authority to impose these tariffs, even after other measures were challenged in the US Supreme Court.

Equipment already ordered in advance

According to Gilad Ben-Zvi, an energy analyst at Leader Capital Markets, the new tariff will impact Israeli solar companies such as Enlight, Doral, Nofar, and OPC.

"We expect solar panel prices to rise from 27 cents to 38 cents per watt. This is an increase of over 40%, which will raise construction costs for developers. It is already more expensive to build in the US than in Europe due to a combination of tariffs and tax incentives that lead suppliers to raise prices," Ben-Zvi notes.

It is important to note that tax incentives are expected to expire for projects that did not begin construction last July, as well as those not connected to the grid by the end of 2027.

"Since the measures take effect in December, there is enough time to organize. Furthermore, projects at an advanced stage procure equipment well in advance," Ben-Zvi adds.

Conversations with prominent Israeli solar developers confirm that equipment for their current project backlog has already been ordered, securing their operations at least until 2028.

What about the coming years?

The long-term outlook remains uncertain. The tariff could be canceled or replaced by another mechanism, potentially under a different administration. Some companies have already signed contracts with large electricity consumers who have committed to absorbing part or all of the tariff costs.

Today, the massive demand for electricity in the US from data centers, driven by the AI revolution, provides solar developers with a strong negotiating position.

The law also allows for exemptions from the minimum price and tariffs if companies commit to investing in US-based solar infrastructure. This will allow for continued, albeit partial, imports from China. "Companies like T1 and Canadian Solar have already decided to move production to the US, but even they will suffer from tariffs on intermediate materials," Ben-Zvi explains.

The economic impact remains to be seen. PV Magazine estimates an increase of $4 to $5 per megawatt-hour, which will be passed on to final consumers but will partially compensate developers for their new costs. "It will be interesting to see how quickly the economy adjusts to these new price realities," the analyst concludes.