President Biden's recent tariffs on Chinese imports have significantly changed the solar energy sector. The administration has decided to end a two-year exemption on solar import tariffs from Southeast Asian countries, such as Cambodia, Malaysia, Vietnam, and Thailand. With this region being the leading exporter of solar panels to the United States, the decision is expected to substantially impact solar panel prices in the American market.

Yahoo Finance's Akiko Fujita breaks down the implications of this policy shift.

For more expert insight and the latest market action, click here to watch this full episode of Wealth!

This post was written by Angel Smith

Video Transcript

Well, everyone's solar panels, they're about to get more expensive when President Biden added tariffs on Chinese imports.

He also lifted a two year exemption on tariffs for solar imports from Southeast Asian countries here to break down why this could impact your next solar purchase?

We've got our very own Akiko, Fujita, Akiko, what do we know about this brad?

These tariffs on solar imports from Southeast Asia are set to resume tomorrow and they're expected to have a much bigger impact on prices than those tariffs on Chinese solar imports largely because more than 80% of the solar panels that come into the US right now come specifically from four Southeast Asian countries.

We are talking about Cambodia, Malaysia, Thailand and Vietnam.

The region has become a hub for solar manufacturing as the results of solar tariffs the US has had in place on Chinese imports.

Now remember those duties were first placed on imports 12 years ago during the Obama administration, they ramped up during the Trump years and since then, China has been routing its production to Southeast Asia to avoid the 25% tariff that's been in place.

President Biden, of course, has now increased that to 50%.

And the administration is, these duties are necessary to prevent Chinese companies from dumping cheaper goods into the US and to protect the US solar manufacturers.

But solar developers argue that will only hike prices and limit their choice of suppliers.

Now to be clear, the oversupply coming from China has driven down solar panel prices.

They fell nearly 50% globally last year according to the IE A.

But the problem is there just are not any other places to source from because China controls more than 70% of global supply.

And this chart points to why the US hasn't been able to make a dent in market share despite having tariff protection.

The US doesn't have the manufacturing capacity in place.

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The big orange chunks you see there are what has been announced.

A lot of those announcements have come through since the Ira.

We're talking about roughly $100 billion in investments.

But many experts I've spoken to say that build out of the domestic industry is going to take about 5 to 10 years.

The fear is that these tariffs and the higher prices that come with it will slow the transition to renewables at the very time.

The US is trying to accelerate it.

And Brad here's a number to leave you with.

This comes from the Solar Energy Industries Association.

The number of solar installations in the US expected to double by 2030 then trip by 2034.

So they're looking at a significant ramp up.

The question is going to be, where is that supply going to come from?

And with these new tariffs set to take effect tomorrow, our price is going to be even higher and customers maybe rethink their options that could have a huge implication for the wave of targets that companies had set forth to getting through to and through this transition as well here, Akiko, excellent reporting and great breakdown.

Akiko Fujita Yu finances on.

Thanks so much.