Watch: Barron’s Senior Energy Writer Laura Sanicola and OPIS Senior Editor of US Solar Colt Shaw discuss what’s ahead for energy this week.

Watch this week’s episode for insights into how recent policy changes and executive orders could affect demand for solar both from a residential side and utility scale side as well as how tariffs on certain countries could impact the US solar market. 

Transcript:

LAURA SANICOLA: Hi, everyone. This is Laura Sanicola, author of Barron’s Energy Insider, and I’m here today with Colt Shaw, senior editor of US Solar at OPIS. Colt, thanks for being with me today.

COLT SHAW: Thanks for having me.

SANICOLA: So there has just been so much news going on that impacts the solar energy market. Obviously, solar energy is the fastest growing electricity generator in the US right now, but how do recent policy changes, executive orders, and such affect demand for solar both from a residential side and utility scale side?

SHAW: So both have slightly different fates, but both are in a worse position than they were just a year ago. Since Trump’s election, we’ve been kind of just wondering what exactly is going to become of these tax credits. So we finally got a little bit of clarity with the passage of the big beautiful budget bill earlier this month, which kind of reshaped the phase-out schedules for both. Residential solar is basically done after this year. If you don’t start a project this year, you can’t get any value out of that. Utility scale solar, you have about a year to to start construction, and then you’d get four years to put your project in service, or otherwise, start your project before, have your project in service before 2027.

Within two days, he kind of undercut this new certainty by saying that he’s going to tighten restrictions around how you can kind of secure that eligibility. And we’re not expecting a report on this until mid-August. So it kind of complicates the next forty five days. Some people are rushing to safe harbor modules. Other people are getting their plan together in terms of what exactly their approach might be as soon as new rules drop. So it really complicates things. I will say there’s kind of these three safe harbor windows now. You have until mid-August to hopefully work under the current rules as they stand. I think you’d have a good case to argue that in front of a court. And then you have until the end of the year before foreign entity of concern restrictions kick in, so you can still bring in foreign modules until then and and qualify for the ITC. But beyond that, it gets very complicated in terms of new tariffs, new restrictions around who you’re working with, especially Chinese firms, and just overall more complicated in general. And the timeline to get your project in, the clock is ticking starting today, basically. So it’s a it’s a new world for solar. 

SANICOLA: And you mentioned new tariffs, reciprocal tariff situations obviously escalated. And after a lull, we’ve seen new announcements of tariffs on certain countries. How is that expected to impact the solar market as well?

SHAW: Yeah. So upheaval, basically. There’s been all sorts of tariffs. We’ve been waiting for these reciprocal tariffs for about three months now. So these have kind of been talked about and hashed over, and I know a lot of companies are making plans to move out of Southeast Asia. But the latest as of now is the reciprocal tariffs come on August first. There’s now an updated list. Less countries are facing them, but solar supply chain countries are still heavily impacted.

And it’s kind of difficult to say exactly what country is winning when you include all the different ADCVD rates, which are different from company to company. So you know, it depends on where you’re getting your upstream components from. So all these tariffs stack in different ways, but, essentially, it’s more expensive to import modules now than it was. It’s still a little bit cheaper for the time being than to, you know, import or to buy domestically, but this complicates things hugely.

And then just this week, they initiated a section 232 investigation, which is likely to lead to new tariffs on polysilicon, which had their tariffs doubled to fifty percent by the Biden administration December. And then finally, a new ADCVD case dropped or a new petition dropped yesterday into Laos, Indonesia, and India, which is expected for some time. India was a little bit of a surprise, but a lot of these companies just moved factories there in the last year to get away from the previous ADCVD case. So it’s just more upheaval. A lot of people are now looking towards North Africa and Middle East as the next locations, and there’s a chance that this investigation just kind of speeds up that that changeover.

SANICOLA: So in theory, these tariffs are meant to close the gap between buying domestically from manufacturer like First Solar and from buying overseas where it’s significantly cheaper. But given the policy changes, that disincentivizes solar manufacturing to some extent. Is that a kind of fair way of looking at it?

SHAW: Yeah. There’s a few crosswinds where plenty of American manufacturers still reliant on cells from abroad, and those are tariffed as well. So domestic prices will go up concurrently. It depends. I don’t know, you know, the extent to which, you know, it might close the delta between the two a little bit. But and also, you know, some third of the of the factories in the US, module assembly factories, are owned by Chinese companies, which will also be affected by these new foreign entity of concern restrictions. So it’s not exactly like you’re you’re completely risk free just buying in the US. So I think it’s not exactly clear what American manufacturing for solar is gonna look like in two years, but it’s not going to get bigger. I would say that. It’s probably it’s going to stay as is or probably contract a little bit as cells start to lose value as the domestic content bonus goes away. And then beyond that, I think they’re just gonna have to compete on, you know, on price with imports.

SANICOLA: Alright, Colt. Thanks so much for breaking down a really complicated solar situation with us, and thanks everyone for joining. We’ll see you next week.