What Trump’s executive orders mean for US solar PV

Challenging the IRA

The president has announced challenges to the Inflation Reduction Act (IRA), a cornerstone piece of climate and economic legislation from the Biden administration.

Trump’s executive order on “Unleashing American Energy” announced plans to revoke an executive order on the “Implementation of the Energy and Infrastructure Provisions of the Inflation Reduction Act of 2022.”

The order said that this act and a number of others “are revoked and any offices established therein are abolished”. It is unclear exactly how much of the IRA and its effects this order intends to revoke. Trump also called for an end to the “Green New Deal”, which encompasses the IRA and the Bipartisal Infrastructure Law (BIL).

It required that “all agencies shall immediately pause the disbursement of funds” administered through either bill. It is unclear whether this would cover tax credits or just direct funding, such as that which is provided by the Department of Energy’s Loan Programs Office (LPO).

Though it remains unclear exactly which parts of the IRA or which offices are covered by the order, it clearly shows Trump’s ambition to undo the legislation which has spurred the US’ clean energy revolution more than any other.

There is bipartisan support for the IRA and its clean energy benefits across the US government, and last week a group of Attorneys General implored congressional leaders to “safeguard” the legislation and the economic benefits it has brought.

States will also have something to say about efforts to repeal the IRA, perhaps Republican states in particular, which have benefitted from many of the manufacturing expansions in solar and energy storage technologies that the legislation supported. Experts supposed that a full repeal of the IRA was unlikely prior to the transfer of power, but the president’s ambitions – if not the route to achieve them – are laid out fairly plainly.

The executive order also announced a review of agencies that “potentially burden the development of domestic energy resources”. It calls on government agencies to “identify those agency actions that impose an undue burden on the identification, development, or use of domestic energy resources—with particular attention to oil, natural gas, coal, hydropower, biofuels, critical mineral and nuclear energy resources.”

Trump also announced an end to the electric vehicle (EV) mandate and a suspension on offshore wind leasing.

Paris Agreement withdrawal

As in his previous term, Trump has ordered the withdrawal of the US from the Paris climate agreement, the international treaty on climate change signed in 2016.

In an executive order, the president said the US would “immediately submit formal written notification” to the United Nations withdrawing from the agreement.

Trump also declared a national energy emergency, promised to fill the country’s strategic oil reserves and doubled down on his pledge to “drill, baby, drill”. He plans to increase fossil fuel production in Alaska and begin exporting natural gas.

The Paris agreement aims to limit global warming to 2 degrees Celsius above pre-industrial levels. Countries that have signed the treaty agree to support these efforts through domestic decarbonisation plans and financial support from large economies to enable decarbonisation in developing countries.  

While there is a clear contrast between the Trump and Biden administrations’ support for renewable energy and climate targets, which carries significant weight, the US solar market has largely been driven by corporate demand. Either through private sustainability commitments or the price certainty offered by the long-term power purchase agreement (PPA) market, corporate demand has propped up solar growth regardless of the government’s international commitments.

We explored this dynamic in a blog following Trump’s election victory in November.

‘America first trade policy’

In his election campaign, Trump made clear his plans to transform US trade policy.

Trade disputes have become central to the US solar industry, particularly as the country began building out meaningful domestic manufacturing capacity under the Biden administration.

Despite the commissioning of some of this module manufacturing capacity and an emerging cell production footprint, the US is still heavily reliant on imported solar goods and components, which are dominated globally by Chinese companies.

An executive order signed yesterday promised to establish an “External Revenue Service … to collect tariffs, duties, and other foreign trade-related revenues.” It is unclear how this ‘ERS’ would function.

Moreover, it said that the secretary of commerce would “review policies and regulations regarding the application of antidumping and countervailing duty (AD/CVD) laws”. This included establishing whether the current AD/CVD measures are sufficient to “induce compliance” by foreign governments and entities in US AD/CVD investigations.

AD/CVD procedures are designed to identify and counteract foreign subsidies and price dumping practices that affect products shipped to and sold in the US.

The solar industry has been wracked by prominent AD/CVD investigations, most recently into solar cells produced in four Southeast Asian countries. Commerce has set initial AD and CVD rates for cells produced in Vietnam, Thailand, Malaysia and Cambodia by various companies following a petition launched in April 2024 by a group of US-based solar manufacturers.

This investigation has been forecast to cause supply issues for US module manufacturers, which a strengthened policy could ultimately exacerbate.

Trump’s executive order also announced a review of US trade relations with China, “particularly with respect to industrial supply chains and circumvention through third countries.”

Portions of the US solar industry have leant into this firmly protectionist rhetoric, highlighting a need to untether the country’s supply chain from dependence on Chinese firms.

A report published today by Iter Consultancy and supply chain data firm AIMMS claims that 38% of US solar companies are “only ‘somewhat prepared’ for trade policy changes, relying on suppliers to absorb increased tariff costs.” It also said “62% of US firms rank tariffs as a high risk but lack diversified supplier networks, exposing them to supply chain shocks.”

In a statement following the inauguration, Abigail Ross Hopper, president of the Solar Energy Industries Association (SEIA), said: “Solar, now a US$60 billion industry, is adding more new capacity to the US grid than any other fuel source amid the largest increase in electricity demand since World War II. It’s clear that we will not reach president Trump’s vision for American energy dominance or technological innovation without continued solar and energy storage growth.

“Under president Trump’s first term, the solar industry grew by an astounding 128%. We’re ready to work with the new administration and Congress to continue the buildout of solar and storage, including the ongoing surge in domestic manufacturing that is reducing our reliance on foreign countries and supporting American workers.”