Navigating US module procurement in uncertain times

“There’s a chilling effect for every segment of the supply chain,” says attorney Angela Santos, partner and customs practice leader at law firm ArentFox Schiff, of the current tariff situation. “Developers are a little bit wary of investing huge funds in new developments, and that trickles down to the producers, which trickles down to their supply chain. There is a lot of wait-and-see going on.”

Santos will participate in a panel discussion at ModuleTech exploring how the evolving policy landscape in the US is impacting PV module procurement and due diligence. As counsel to firms throughout the solar supply chain, she has seen firsthand how President Donald Trump’s global trade tariffs have reverberated through the industry, creating huge uncertainty and a legal minefield for anyone seeking to import equipment.

“Tariffs are affecting all importers and really all producers in the United States because they still rely on imported goods,” she says. “The tariff rates keep changing, and there’s a lot of uncertainty in terms of whether these tariffs will remain, because there are a number of court cases pending right now to invalidate the tariffs or limit their scope.”

Unsurprisingly, Santos and her trade team are busy providing advice to companies up and down the supply chain on the likely impacts of tariffs on their operations: “What’s that going to mean in terms of supply chain? What’s that going to mean in terms of costs? And is there anything that companies can do to mitigate the effects of these tariffs?”

But given the unpredictable nature of the situation and the Trump administration’s propensity to change tariffs at a moment’s notice, this is an understandably challenging task. Santos says the situation is considerably worse than in the first Trump term, when there was a certain predictability about policy direction.

“The difficult part now is that nobody knows what’s going to happen, and it could change at any time,” she says. “Even within the administration, you receive conflicting information. What is true today might not be true tomorrow or in two hours. Nothing’s final until it’s final, and even when it’s final, it could change.”

The advice Santos is giving her clients varies from case to case, depending on the particular company and its activities, but typically involves measures such as escalation clauses in contracts in case tariffs suddenly change and render business cases invalid, and developing tariff mitigation strategies to help firms reduce their tariff liabilities. Now, more than ever, Santos says companies need to be prepared for a range of eventualities, given the unpredictability of the trading environment:

“Companies need to really stay on top of all the developments because they’re so fast changing and there’s very little notice provided before they’re implemented. They need to have possibly some inventory on hand because rates could go up overnight. They just have to have strategic planning [in place] to ensure that they can weather these challenges.”

Tax credits on the line

The second major source of worry for the industry is the fate of the various tax credits laid out in the Inflation Reduction Act. These have been an undoubted success, sparking a prolonged boom in project deployment and, as intended, stimulating domestic PV manufacturing.

Even now, that boom is continuing, with the latest figures from the Solar Energy Industries Association (SEIA) showing the first quarter of 2025 to be strong both in terms of project deployments and new manufacturing capacity. In the early days of the second Trump term, the industry seemed fairly sanguine about the fate of the IRA, maintaining that its success in creating jobs in Republican-voting areas guaranteed its safety. So it was with some shock that the first draft of Trump’s “big, beautiful” tax reconciliation bill, approved by the House a few weeks ago, went much further than some had feared in outlining proposals to roll back many of the tax credits that have been the industry’s lifeline in recent years.

According to Tom Beline, a partner at law firm Cassidy Levy Kent, who will take part in the same ModuleTech panel discussion as Santos, the immediate response among the US solar industry to the House approval of the bill has been one of anxiety.

“There’s a real possibility that there’s a lack of being able to carry on; that anxiety is palpable,” Beline says. “I don’t think it’s causing any adjustments in the supply chain exactly, but I do feel that people are anxious and that they just want to know: are they alive, or are they dead?”

Having said that, Beline seems reasonably optimistic that the significant amount of political horse-trading that the bill will undergo as it now passes through the Senate could work in favour of the tax credit regime. In particular, he highlights differences of opinion between the House and Senate Republicans over state and local tax (so-called Salt) deductions, which are supported in the House but not in the Senate.

Trump is reportedly not keen to cut these entitlements, as Senate Republicans want, but has indicated that he will consider waste, fraud and abuse in entitlements as a way to find more money, potentially freeing up funds to continue industrial subsidies, which are fundamentally in line with his desire for more domestic manufacturing.

“If that’s the case, and if that’s the sort of direction things are going, I can see a situation where we actually have this big, beautiful bill that does the type of industrial policy that this president wants across the board, including in the renewables space,” says Beline.

This, of course, comes with the heavy caveat that nothing renewables-related should be considered safe under an administration that is ideologically opposed to clean energy. But Beline adds: “This President is different from past Republican presidents, in that he believes in industrial policy, and I think he’s convinced that industrial policy not only needs tariffs, but it needs support from the government to stimulate production activities.

This is particularly the case in the context of recent revelations that possible spying devices have been found in Chinese-made solar inverters. “If these things that came out recently about Chinese kill switches in certain renewables projects [are] corroborated and that gets more play for [Trump], I suspect that that’s going to result in a drive towards creating an environment where you can have a truly domestic manufacturing operation,” Beline says.

Ultimately, the misfortune of the current situation facing the US solar industry is that it is yet another manifestation of the infamous “solar coaster” that has been a defining characteristic almost since its inception. As such, Beline says, this situation does no one any favours long term:

“The unfortunate thing in the solar industry that’s existed for, you know, a decade, is that every time you feel like you’ve got certainty of some form or another, whether it be tariff policy or government industrial policy, it feels to me like you lurch forward for a couple of years and they everything is proverbially pulled out from under you and you’re starting almost all over again.

“And if you think about it, just from a cost of doing business perspective, we’re talking about adding cents per watt, just because of the creation of uncertainty. And when you’re a global commodity, every cent matters.”