Record installations are propelling U.S. solar projects toward a booming future.

The expiration of the two-year U.S. tariff holiday on solar panels from Southeast Asia has prompted American project developers to quickly utilize the substantial amount of duty-free equipment they accumulated over that period by the end of this year. This development is expected to lead to a surge in U.S. solar installations, potentially impacting the emerging domestic manufacturing industry eager to shift to American-made gear.

According to Clean Energy Associates, U.S. solar developers have stockpiled around 35 GW of imported panels in warehouses since President Joe Biden suspended duties on Malaysia, Thailand, Cambodia, and Vietnam in 2022 to accelerate domestic projects in the fight against climate change. This stockpile is nearly equivalent to the solar capacity that the U.S. is projected to install in 2024, as per Wood Mackenzie.

The majority of the accumulated inventory is believed to originate from the designated countries. Once the tariffs are reinstated on June 6, companies are left with a 180-day window to use the Southeast Asian stock before incurring additional costs. This situation has prompted companies to ramp up project building activities, with utility-scale installations surging by 135% to 9.8 GW in the first quarter, according to Wood Mackenzie.

Stacy Ettinger, Senior Vice President of Supply Chain and Trade for the Solar Energy Industries Association, acknowledged that the temporary tariff suspension helped ensure a sufficient supply of solar modules to support the growing need for clean energy deployment. On the other hand, trade attorney Tim Brightbill highlighted concerns about the inventory surplus and its role in the market price collapse, impacting U.S. panel manufacturers.

Despite facing challenges such as the pandemic-induced supply chain disruptions, the U.S. solar industry witnessed a significant increase in imports in 2023 and the first quarter of 2024, with the majority originating from Southeast Asian countries. The eventual enforcement of the 180-day deadline is expected to prevent excessive stockpiling, although SEIA has not specifically addressed this matter.

Moreover, the U.S. solar sector achieved record installations early this year, accounting for 75% of the electricity generation capacity added to the national power grid. The rapid growth in solar capacity, particularly in utility-scale installations, was supported by federal and state policies aimed at promoting clean energy and reducing emissions to combat climate change.

The report published by Wood Mackenzie and SEIA highlighted the positive impact of the global solar supply chain expansion, improved availability of solar panels, and the decline in panel costs after the tariff moratorium. With Florida leading the way in installations, the U.S. solar industry is poised to maintain its momentum in solar capacity additions, reinforcing the nation’s commitment to achieving renewable energy goals.