Higher battery material tariffs and phased-down IRA tax credits threaten a 15% drop in U.S. storage deployment through 2035 in a “worst-case” scenario, BNEF analysts said.
Dive Brief:
- Despite his close relationship with Tesla CEO Elon Musk, President-elect Donald Trump’s plan to raise tariffs on imported battery materials could chill near-term energy storage deployment in the United States and threaten the viability of some developers and operators, according to experts interviewed by Utility Dive.
- Uncertainty surrounds the fate of the manufacturing and investment tax credits authorized by the Inflation Reduction Act, but geopolitical considerations and the nascent U.S. clean technology manufacturing boom spurred by the credits could prevent full repeal next year, BloombergNEF Energy Storage Analyst Isshu Kikuma said.
- “The tax credits are less likely to be repealed due to Trump’s strong focus on localizing supply chains and the monetary flow currently favoring red and swing states,” Kikuma said.
Dive Insight:
Sweeping tariffs imposed in 2018 and 2019 by the first Trump administration lend credibility to Trump’s threats to impose duties on a broad range of imported goods — including battery materials and energy storage system components — this time around, Gridstor Vice President of Policy and Strategy Jason Burwen said in an interview.
“Anything resembling the magnitude that President-elect Trump or his advisors have indicated” would be detrimental to the energy storage industry, Burwen said. “GridStor has managed its risk effectively, but many of our peers could be highly impacted if these policy changes came to pass.”
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