OPIS Insights

In 2025, the solar industry discovered that its biggest challenge isn’t technological—it’s geopolitical.

Across Asia and beyond, a cascade of tariffs, anti-dumping investigations, and shifting trade alliances has redrawn the global solar supply map. What once looked like a smooth, low-cost manufacturing network now resembles a high-stakes game of regulatory “whack-a-mole,” where each new trade action pushes production—and uncertainty—somewhere else.

Tariffs Trigger Another Supply Chain Shuffle

The latest wave of U.S. trade measures has landed squarely on Southeast Asia, the source of more than 80% of America’s solar panel imports in 2024.

Tariffs targeting Vietnam, Cambodia, Malaysia, and Thailand—countries that became major assembly hubs after earlier duties hit Chinese-made modules—have sent manufacturers scrambling once again. New production lines are being established in Laos, Indonesia, and parts of Africa, as companies attempt to bypass restrictions while keeping costs down.

Yet the pattern is repeating itself. Each new jurisdiction eventually faces scrutiny, investigations, or shifting trade classifications. For developers and buyers, the effect is cumulative: a complex, unpredictable import environment where prices rise even as supply remains plentiful.

“It’s a game of whack-a-mole,” one industry analyst remarked during the OPIS Global Solar Markets Webinar.

“Every time tariffs close one door, manufacturers find another—but it always comes with a higher price tag and more legal risk.”

Rising Costs and Legal Uncertainty

For U.S. buyers, the tariff merry-go-round means one thing: higher prices, no matter where the modules come from. Even domestic assemblers are feeling the pressure, as they rely heavily on imported cells and wafers that are now more expensive or harder to source.

Compounding the uncertainty are recent court rulings and trade policy reversals that have muddied the regulatory landscape. One federal court recently vacated a tariff moratorium that had shielded certain Southeast Asian imports, while other cases are challenging the administration’s authority to impose duties retroactively.

The result? Developers and financiers are forced to hedge not just against commodity price fluctuations—but against the evolving interpretation of trade law itself.

The Ripple Effect on Project Economics

The immediate consequence of these trade disruptions is a tangible rise in project costs. Analysts estimate that average landed module prices in the U.S. climbed 12–15% in Q3 2025, reversing years of steady declines. Developers have responded by delaying procurement decisions or renegotiating power purchase agreements (PPAs) to absorb the shock.

Meanwhile, global investors are shifting their capital toward markets with more predictable trade environments—including Europe, India, and Latin America—where localized production or diversified supply chains offer greater stability.

Long-Term Outlook: Consolidation and Diversification

In the long term, the trade turbulence could accelerate the consolidation of solar manufacturing into countries less exposed to volatility and tariff risk. India, for example, is rapidly expanding its upstream production capacity under the Production Linked Incentive (PLI) scheme, while Turkey and Mexico are emerging as alternative assembly centers for regional markets.

Still, even these new hubs face challenges: limited infrastructure, higher financing costs, and exposure to shifting policy priorities. For now, global solar trade remains caught between the drive for localization and the realities of interconnected supply chains.

The Takeaway

The message from 2025’s trade turbulence is clear: solar’s global expansion is no longer just about efficiency; it’s about resilience.
As protectionism reshapes supply chains, the industry must balance cost competitiveness with security of supply. The long-term effect may be a leaner, more geographically diversified manufacturing landscape, but the short-term impact is unavoidable: project costs are rising across the board, and uncertainty is the new normal.