In the political backrooms of Washington, D.C., a tug of war is taking place —— one that could either advance U.S. clean energy goals or shift the focus back to past energy challenges.

• Trump and Biden Policy Review
• What if: A Republican or Democratic Victory
• The Swing States

The Trump legacy and its lasting impact

Former President Donald Trump reshaped U.S. trade policy during his first term through a series of aggressive tariffs aimed at protecting domestic industries. In 2018, invoking Section 201 of the 1974 Trade Act, Trump imposed tariffs of 30% on imported solar cells and modules, with the rate set to decrease by 5% annually over four years, to shield the nascent U.S. solar manufacturing sector from low-cost imports, primarily from Asia.

Additionally, he enforced Section 301 tariffs, ranging from 10% to 25% on a wide range of Chinese imports, including solar equipment components such as inverters and certain raw materials. Furthermore, Section 232 tariffs targeted steel (25%) and aluminum (10%) imports, which are critical for solar racking and mounting systems.

While these tariffs were meant to bolster U.S. manufacturing, they also had unintended consequences. Many U.S. solar companies faced higher costs, which slowed down the deployment of solar projects and created a temporary setback for the renewable energy sector. At the same time, trade tensions with China escalated, leading to broader economic implications beyond the solar industry. The tariffs reshuffled global supply chains, with some countries benefiting from diverted trade, while others suffered from restricted market access.

Biden’s approach: Looking for the fine line

Biden began his term by retaining many of the Trump’s tariffs on Chinese imports, signaling a continued hardline stance on China. His administration took a significant step regarding the anti-circumvention tariffs and ongoing AD/CVD investigations into solar imports, including recent probes against Vietnam, Malaysia, Thailand, and Cambodia, which are believed to use Chinese-origin components to circumvent U.S. tariffs on Chinese products.

Still, recognizing the need to alleviate the pressure these tariffs placed on the solar industry, in June 2022, Biden administration initiated a 24-month tariff exemption. This two-year moratorium is intended to provide solar developers and manufacturers time to adapt while maintaining pressure on trade compliance to support U.S. manufacturing.

Two years later, on August 12, 2024, Biden doubled the volume of solar cells that could be imported tariff-free, raising the quota from 5 GW to 12.5 GW, reflecting an ongoing struggle to balance domestic protectionism with the need for affordable clean energy components.

Beyond these tactical measures, Biden's strategy involves substantial investments in the renewable energy sector. Through legislative efforts like the Inflation Reduction Act (IRA) and the bipartisan infrastructure bill, his administration has directed significant funding towards developing a sustainable domestic supply chain for solar energy and other renewables. These investments aim to reduce the country's dependence on foreign imports over time, aligning with a broader vision for energy independence and economic growth.

Republican Victory: Revisiting tariffs and trade barriers

Trump’s bid for a second term includes a proposal to increase tariffs by 10 percentage points on all U.S. trading partners, with a staggering 60% tariff on Chinese imports. While Trump’s first term saw tariffs on steel, aluminum, and hundreds of billions of dollars of Chinese goods, the scope of these new measures could lead to far-reaching macroeconomic effects, including a significant rise in inflation and potential retaliation from trading partners.

A return to such policies could disrupt the PV supply chain, increase costs for solar projects, and slow down the expansion of renewable energy. For the solar industry, which relies heavily on a global supply chain, these tariffs could disrupt the flow of critical components like PV modules, inverters, and other essential materials.

Democratic Victory: Attempting to sustain the renewable surge

Although Kamala Harris has not made recent statements specifically about solar energy, a Democratic win would likely mean a policy environment that continues to foster growth. The IRA has already set the stage with significant investments in clean energy, and a second Democratic term could bring even more aggressive climate action. This could include expanded tax credits and a bolstered focus on renewable energy infrastructure.

While the Democrats’ policies represent a shift towards more collaborative and incentive-driven strategies, they also raise questions about their long-term sustainability. The reliance on economic incentives and trade measures may offer immediate growth for the U.S. solar sector, but there are concerns about whether these incentives can maintain momentum without creating dependency. Unlike Trump's tariff-centric approach, which aimed to protect domestic industries from foreign competition, Biden's strategy involves navigating complex international trade dynamics, which could become challenging as global competition intensifies.

The swing states: Sun Belt in the spotlight

Recent polls indicated a tight race in key swing states—North Carolina, Arizona, Nevada, and Georgia—with no candidate from either party achieving a decisive lead above 50%.

These Sun Belt states are pivotal not just for their political weight but also for their role in the U.S. solar market. According to statistics of the Solar Energy Industries Association (SEIA), Nevada ranked 8th in 2023 for PV installations and rose to 6th in the first quarter of 2024. North Carolina showed significant progress, moving from 11th in 2023 to 4th in 1Q24, demonstrating a strong potential for solar expansion. Similarly, Georgia, which was 14th in 2023, surged to 7th in 1Q24, indicating a robust uptick in solar development efforts. Arizona consistently maintained its 5th position, showcasing steady solar growth.

Their performance in 2023 and progress in early 2024 underscore their strategic importance. With abundant sunshine and expanding renewable energy sectors, the four states have emerged as battlegrounds not only for political parties but players in the US solar industry.

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