Editor's note: This story has been updated. 

Electricity demand is rising. Permitting issues remain. Clean energy incentives are in jeopardy. Supply chain challenges are sending prices up. Critical equipment such as transformers are delayed. And, domestic manufacturing is insufficient to meet all U.S. energy needs.

Now, clean energy players are facing yet another disruption: tariffs.

“We’ve already had these huge supply disruptions just in general, trying to get the materials they need. They also have permitting issues they have to deal with in terms of where are they going to place them,” Danny Whigham, advisory sector leader for PwC, told Hart Energy. “Not to oversimplify it, but if they’re purebred, they’re in renewables, they know they’re in it forever. I think they see it as just another disruption they have to deal with.”

President Donald Trump vowed in his Jan. 20 inauguration address to “tariff and tax foreign countries to enrich our citizens” in an effort to overhaul the U.S. trade system. He envisioned “massive amounts of money pouring into our Treasury, coming from foreign sources.”

While tariffs or additional fees on imported products and materials could bring in more federal revenue and promote development of domestic manufacturing, cost increases could hit project developers and end consumers alike in the nearer term. They also can, and have, sparked retaliatory tariffs by impacted countries.

Trump’s rollout of new tariffs has been bumpy, marked by delays and revisions. Executive orders have been issued to impose tariffs—with some exceptions—on imports from Mexico (25%, delayed), Canada (25%, delayed) and China, which swelled to 125% plus the 20% “fentanyl tariff.” Reciprocal tariffs of 10% on many other countries were announced then mostly suspended. However, a 25% tariff on all steel and aluminum imports remains.

The aluminum and steel tariffs are unlike tariffs of the past.

“The Trump administration is doing something unusual, which is imposing tariffs not only on some finished goods and other components or materials that go into finished goods, but they’re also imposing tariffs on the sort of downstream products made with those components,” Tom Starrs, vice president of government relations and public affairs for EDP Renewables-North America (EDPR-NA), told Hart Energy.

Take steel, for example. Inverters—a crucial piece of a solar panel that converts direct current (DC) electricity generated by the solar panel into alternating current (AC) electricity used on electrical grids—are typically stored in protective boxes made of metal such as steel.

“Historically, we would have imposed tariffs on the steel that was being imported to make those boxes or we might have tariffed the inverter itself, but now we’re looking at putting tariffs, not on the inverters themselves, but really on any good that’s made with imported steel that’s subject to the tariff,” Starrs explained. That, he added, has “profound implications”—not just for renewable energy but for the entire energy sector, including oil and gas.

Isn’t it ironic?

Houston-based EDPR North America, a subsidiary of EDP Renewables, entered the U.S. in 2007 and has since become one of the top five renewable energy producers in the U.S. The company has more than 11.4 gigawatts (GW) of renewable energy in operation, according to its website, with offerings in solar, wind, energy storage and green hydrogen.

To help strengthen its supply chain given the evolving tariff situation, Starrs said EDPR-NA is supporting domestic manufacturers of products the company buys and diversifying. “Expanding our supply chains really is a risk hedge against tariffs being imposed, again, seemingly ad hoc on different countries at different rates,” he said.

Federal law is already in place to boost investment in domestic manufacturing.

“One of the ironies of this situation is that those incentives to support domestic manufacturing are also at risk since they’re for the most part embedded in the Inflation Reduction Act,” Starrs said, “which as you know is at risk at this point not so much because of clean energy incentives are being targeted by Congress, but because Congress has the difficult challenge of trying to extend or expand the Tax Cuts and Jobs Act, the original so-called Trump tax cuts, and they’ll need to come up with offsetting revenues to accommodate the extension of those tax cuts.”

Though EDPR-NA is not a manufacturer, it is spending time trying to keep incentives for domestic manufacturing and renewable energy projects off the chopping block.

For imported products needed for U.S. projects, price increases are expected due to the tariffs. Conversations with vendors warning customers about price increases are starting to happen across all industries, he said.

“This is very early days with the tariffs that were just imposed. … But I have zero doubt that we’ll start seeing significant price increases announced as a result of the tariffs. That’s already happening and will continue,” he added.

Whigham, using rooftop solar as an example, said technology progress has helped costs fall in the past; however, other barriers come into play. These may be “anti-competitive barriers, cultural barriers, lobbying barriers, policy barriers come in, and they introduce new variables,” he said. He cited flat rooftop solar costs lately as an example. “Now, does that change as a result of the tariffs and all this? Who knows.”

China has dominated many supply chains, including for solar panels, by flooding the world with cheap goods. While tariffs on China in the ongoing trade war with the U.S. is intended to support domestic manufacturers and create jobs in the U.S., it has increased costs for projects and consumers in some instances.

EDPR-NA typically looks for buyers for electricity generated from its projects two to three years in advance by locking in long-term, often fixed-price power purchase agreements.

“If we’re pricing two or three years out, then unexpected price increases like those attributable to these tariffs are going to cause havoc,” Starrs said. “It does create a lot of turmoil particularly for the relatively near-term projects … where we’ve already contracted for the sale of that energy. Less turmoil, but still some turmoil, for the projects that are further out where we have more of an ability not only to adjust the costs for that project, but have those cost adjustments reflected in the price that we’re ultimately going to go to market with for that power.”

For projects with fixed-price contracts in place, renegotiations are pursued. But the buyer has most of the leverage, Starrs added, choosing whether to accept part or all of the price increase.

The difference likely falls to the consumer or ultimate buyer.

‘We’re here, we’re growing’

Some companies may be in better shape to weather the uncertainty. Starrs puts solar panel manufacturers in the U.S. among them.

“The reason that domestic solar panel manufacturing is in better shape is because they’d already been ramping up aggressively in response to … the domestic manufacturing incentives that were put in place mostly pursuant to the Inflation Reduction Act,” Starrs said.

Former President Joe Biden’s signature climate law, which the Trump administration is unraveling, made billions of dollars in incentives available to developers of clean energy projects. One of the law’s intentions was to increase domestic energy production and manufacturing, reducing reliance on foreign countries amid goals to lower emissions.

For solar panel manufacturers, the IRA includes the 45X advanced manufacturing production tax credit and the 48C advanced project investment tax credit. The incentives are behind the solar panel boom unfolding in the U.S., where the solar sector installed a record 30 GW of utility-scale solar to the U.S. grid in 2024. Forecasts point to another 32.5 GW of new capacity in 2025, according to the U.S. Energy Information Administration.

“The latest tariffs just make it more likely that those announced investments will proceed to full-scale manufacturing and that we’ll see significant contributions to the U.S. solar industry by domestic manufacturers,” Starrs said.

The tariff situation does not appear to have given solar panel maker Waaree Energies any pause. Waaree, the largest solar panel manufacturer in India, entered the U.S. market in January 2025 with its first solar module manufacturing facility in Brookshire, Texas. On April 9, the company announced plans to add 1.6 GW of capacity at the site, bringing its total capacity to 3.2 GW. Amit Paithankar, whole-time director & CEO of Waaree Energies Ltd., said the U.S. is a key market for the company and called solar the cheapest form of energy.

“At a time when the world is redefining the rules of global trade, we’re not waiting for the dust to settle—we’re building through it,” Paithankar said in a statement.

He added, “We don't speculate on demand—we create certainty through commitment. Our approach is clear: secure the order, invest in capacity and deliver with confidence,” he said. “The strength of our U.S. orderbook is a testament to the trust we’ve built, and this expansion is a signal—we’re here, we’re growing and we’re deeply invested in powering America's energy future.”

In the meantime

In the midst of uncertainty, companies can continue strengthening their supply chains and challenge the status quo, as Whigham put it.

“We’ve got to be better at scenario planning. We’ve got to challenge all of the non-negotiables we’ve dealt with for a while, and we can’t be afraid to pivot strategies to balance,” he said. Customers rely on quality products at a good price point, and it must be good for the environment and community. “We’re going to have to constantly balance those four variables in the equation based on.”

Be agile, Whigham added, citing steps by a major U.S. airline and one of the world's largest retailers. 

The retail giant pulled its first-quarter operating income outlook due to uncertainty related to the on-again, off-again tariffs. The airline did not reaffirm its full-year 2025 financial guidance, saying it would provide an update later in the year as visibility improves.

Oil and gas producers, along with oilfield service companies, renewable energy companies and equipment manufacturers, are set to release their latest earnings soon. Tariffs are expected to be a topic of discussion with analysts.

Back in the day, the supply chain mindset was to seek out the most reliable and most cost-effective goods or services, Whigham said. “Now I think it’s: Where can I get them and where can I depend on getting them under a variety of different circumstances I can’t necessarily see today,” or can this equipment be sourced locally.

“The challenge to that, as we all know, is that it [domestic manufacturing] doesn’t happen overnight,” he added.

The next 90 to 120 days will be volatile, which is something everyone should get comfortable with, he added.

“There’s going to be a lot more pressure put on call it ‘scenario planning,’ call it ‘stress-testing decisions’ on multiple things, and frankly, quickly pivoting decisions or strategies based on things outside of our control,” Whigham said. “Do I think we’ll come up with good agreements with most of the countries in the tariffs? I actually do. I think it will end up in a pretty good spot.”

As a country, the U.S. needs to think about its priorities, Starrs said.

“If one of the top priorities is to meet the increasing demand for electricity, to enable goals the president himself has emphasized, to stay ahead of our competition with respect to artificial intelligence, to remain as global leaders with respect to the construction and operation of data centers and so on,” he said, “if that remains one of our top goals, then the imposition of tariffs increase the cost of meeting those goals [and] runs counter to the strategies that the president seems otherwise to be emphasizing.”

Where the tariff situation ends up remains to be seen. But “one of the principle enemies of any business is uncertainty,” Starrs said.

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