Transitioning Power: The Tariff Hike Continues

The Biden administration has announced plans to double the tariffs on certain solar panel components produced in China starting January , 2025. Tariffs on solar panel materials like polysilicon and wafers will increase from the current 25% to 50%. Additionally, Donald Trump also vowed to raise tariffs by another 10% on Chinese products, and 25% on Canadian and Mexican imports. This could lead to gasoline prices to increase between 35 to 75 cents per gallon, since a lot of refineries rely on Canadian crude oil. 

Photo Credit: Alex Wong 

Passed in 2022, the Inflation Reduction Act (IRA) aims to strengthen domestic supply chains, lower energy costs, reduce greenhouse gas emissions, and create well-paying jobs through project development, worker hiring, and equipment manufacturing. Since Biden signed the law, more than 100 new clean energy manufacturing facilities have been announced in the U.S. Notably, around 80% of these investments are in Republican-led states, with about 60% of the resulting jobs located in districts represented by lawmakers who voted against the act. However, in a speech in New York this September, Trump stated his intention to “rescind all unspent funds under the misnamed IRA.”

Bolstered significantly by funding from the Inflation Reduction Act, the Energy Department’s Loan Programs Office (LPO), is now rushing to provide financing to clean energy technologies before Trump takes office in January. So far in December, LPO announced major investments, including: 

• A $1.45 billion loan guaranteed to Qcells to finance its solar manufacturing facility in Georgia. 

• A $9.63 billion loan to BlueOval SK to further expand U.S. EV battery production. 

• A $1.25 billion loan to EVgo to expand nationwide public fast charging. 

• A $303.5 million loan to Eos Energy Enterprises to advance next generation battery energy storage systems. 

• A conditional loan up to $7.54 billion to StarPlus Energy LLC for up to two battery cell and module manufacturing plants in Indiana. 

Trump is also aiming to get rid of Biden’s $7,500 consumer EV tax credit that is supported by the IRA. However, the incentive includes a requirement of not using battery materials supplied by China, removing the incentive could undermine Trump’s campaign issue of orienting manufacturing back to the U.S.