The United States solar industry is confronting growing supply chain constraints as a result of mounting tariffs and policy restrictions, according to a new report by energy consultancy Wood Mackenzie.
The report highlights how trade measures—particularly anti-dumping and countervailing duties (AD/CVD)—along with restrictions on entities labeled as Foreign Entities of Concern (FEOCs), are reshaping the global solar supply chain. These developments are expected to pose significant hurdles to both domestic manufacturing and the broader clean energy transition.
The finalization of an AD/CVD investigation in June has resulted in steep tariffs on solar cells and modules imported from Southeast Asia, with rates ranging from 41.08% for Malaysia to as high as 660.04% for Cambodia. These figures now exceed tariff levels previously applied to Chinese imports.
Additional trade actions are also under consideration. This month, the U.S. Department of Commerce initiated a Section 232 investigation into imported polysilicon, a critical material in solar panel production. At the same time, a coalition of domestic manufacturers filed a new AD/CVD petition targeting imports from India, Indonesia, and Laos.
Wood Mackenzie warns that these shifting trade dynamics are leading to another round of geographic repositioning among solar manufacturers. Despite ongoing efforts to diversify supply chains, the report notes that Chinese-owned subsidiaries continue to dominate global solar manufacturing.
“The solar industry’s supply chain shuffle reveals a fundamental paradox,” said Elissa Pierce, research analyst at Wood Mackenzie. “Despite billions in tariffs and years of diversification efforts, Chinese companies still control manufacturing through regional subsidiaries.”
Pierce added: “When Malaysian glass suppliers and Vietnamese frame manufacturers are Chinese-owned operations, we’re not achieving energy security. We’re simply paying higher prices for the same supply chain risk.”
The report cautions that the growing complexity of U.S. trade policy could hinder renewable energy deployment, particularly if domestic manufacturers are unable to access certain tax incentives such as the 45X production tax credit due to FEOC restrictions.
Wood Mackenzie also pointed to a looming concern over polysilicon supply. China currently accounts for approximately 95% of global solar-grade polysilicon production, and alternative sources are limited to smaller facilities in countries like Germany, Malaysia, and South Korea. Section 232 tariffs on this material could present “the industry’s biggest supply chain challenge,” Pierce said.
While the U.S. aims to bolster domestic solar manufacturing, the report underscores the difficulties in achieving supply chain independence without substantial new investments and clearer policy direction.
