In the wake of announced tariffs on American trade partners from around the world, speculation began as to what the impact would be on businesses and industries across the country. Despite an energy emergency being declared, it seemed that solar was left out of the conversation, and indeed it became clear that solar would be among the industries impacted by this evolving policy change. We sat down with our CEO to discuss the current landscape of solar, the potential impact of these tariffs, and the proactive steps a ratepayer could take in the face of rising energy costs and pending price increases. If you're interested in saving on your solar system before prices continue to rise, our expert consultants are ready to help you make the switch.

Understanding the Impact of Tariffs

"The primary solar components that go into an installation - you've got your racking, you've got your panels, you've got your inverter, and you've got your battery - in a traditional system today here in California, each of those products are made by different manufacturers in many cases. Those manufacturers get their components from hundreds of manufacturers below them, and so however much we want to purchase product solely from the US, the reality is many of the components that make up the products that we use today, even if that product is made in the US, are still coming from overseas and will be impacted by these price increases."

"The most important thing to draw from this is that even though many components we see in the market now say US made, that only means a certain percentage of the components that are contained in the product are actually USA made and manufactured here. The assembly often happens in the US but the individual components can come from all over the world. We definitely expect to see some impact from these tariffs; for example, some components are ranging as high as +150% tariffs coming over from China; we expect to see 25% tariffs on products coming from Canada and Mexico and that is where a very large portion of the components come from. Mexico, Canada, and China are big exporters of products that make up the primary products that we use."

How could these tariffs impact solar prices?

"So, you know the primary question is: are these price increases really going to end up leaning over into the solar side? The short answer to that question is certainly yes. A large part of the cost of solar installation is the components, mostly on the panels, the inverters, and the battery side. Those big big ticket items will be impacted certainly by these tariffs and we've seen this happen in the past as well. There were some tariffs that went into place ahead of 2022, and one of the manufacturers that we were using at the time and still used today is solar Edge - and they ended up having to pretty much cut an entire component manufacturer of a component out of their manufacturing method technology and move to a a different manufacturer because of these tariffs. That led to some pretty significant product shortages and ultimately a price increase, so not only are we going to see solar pricing be impacted, but we're also going to see product availability be impacted. The less available a product is, the higher the price goes - the higher demand results in a higher price, and that has happened before. We have seen the impact of these tariffs in the past and we expect to see a very similar pattern happen now."