How Tariffs and Permitting Freezes Are Disrupting Renewable Energy in 2025

During SF Climate Week in late April, Spark hosted a dinner for renewable energy executives, founders, and investors. We convened thoughtful leaders who navigated the first clean tech boom at places like SunEdison, PG&E, and founders whose software now powers every commercial solar project. The theme of the night was Clean Energy Development and Permitting under the Trump Administration.

Discussions touched on the impact of tariffs on solar and batteries, with many sharing how the uncertainty is prompting developers to create more resilient supply chains and update their projections.

Renewable energy developers have experienced unprecedented volatility in supply chains and federal permitting over the past few months. It’s an evolving landscape, and in this post, we’ll analyze how our business environment has shifted since the start of the new administration.

Tariffs and the Energy Supply Chain

In 2024, wind and solar reached 17% of US energy generation (surpassing coal), and utility-scale battery storage grew 66%. President Trump announced sweeping tariffs on April 2, 2025, imposing a 10% baseline tariff on all imported goods plus additional taxes for specific countries. The clean energy sector faces particularly severe impacts:

• Grid batteries face approximately 65% tariffs that could exceed 80% by next year—just as the U.S. was projected to add 18.2 GW of utility-scale battery storage in 2025 (according to the EIA). Chinese lithium-ion battery exports to the U.S. reached an all-time high of $1.9 billion in December 2024, making these tariffs especially costly.

• The electric vehicle sector is maintaining Biden's 100% tariff on Chinese-made EVs, while facing increased costs for imported components, including critical minerals, cathodes, ingots, wafers, and polysilicon—all essential for meeting Biden's 50% EV sales target by 2030.

• Solar power faces complications as most U.S. equipment comes from Southeast Asia, which received some of the highest tariff rates. While developers have been stockpiling panels in anticipation, experts warn that the domestic supply cannot meet demand.

  • Chinese solar components now face tariffs of 175-195% (up from 50%), while Vietnam and Cambodia face tariffs of 46% and 49%, respectively.

  • The US has imposed tariffs ranging from 41.56% to 3,500% on Southeast Asian solar panels, affecting $10+ billion in annual imports (the vast majority of US supply). The International Trade Commission must still vote in June 2025 to finalize these tariffs. Markets are already shifting, with imports plummeting from targeted countries and rising from alternatives like Laos and Indonesia.

• Even fossil fuels are not spared—Michigan, Minnesota, and New York face 10% tariffs on Canadian energy imports, while drilling operations face inflated costs for steel, aluminum, and other materials, despite Trump's "drill, baby, drill" mandate.

• Steel and aluminum also carry 25% tariffs. Unlike past tariffs, these lack accompanying domestic manufacturing support, with Inflation Reduction Act (IRA)/Bipartisan Infrastructure Law (BIL) funding frozen and tax incentives under threat.

Implications

• $7.7 billion in projects were canceled in Q1 2025 compared to $1.8 billion in all of 2024, while new project announcements dropped to $175 million in January from the typical $1 billion monthly average.

• The tariffs hit critical supply chains: China produces 40-98% of global clean tech manufacturing capacity, including 95% of polysilicon wafers for solar panels. The U.S. imported over 54 GW of solar panels in 2024 (mostly from Southeast Asia), $24 billion in battery cells, and $1.7 billion in wind equipment. Domestic manufacturers only supply 30% of U.S. wind turbine blades.

• Long-term implications include costlier grid components (inverters, transformers) while facing increased challenges in meeting growing electricity demand.

• About 28% of planned renewable energy projects originally slated to come online in 2024 have been delayed or canceled, representing 42,000 megawatts of capacity.

Renewable Energy Permitting Timeline: January-April 2025

The January Freeze (January 20-31, 2025)

The administration's Day One actions created immediate disruption. The 60-day freeze on renewable energy permitting on federal lands affected approximately 16 GW of solar projects in the pipeline, with Nevada particularly impacted given the BLM's (Bureau of Land Management) control of 80% of the state's land. When federal permitting is frozen or delayed, developers are left with very few options.

Regulatory Confusion (February 2025)

By early February, the freeze's ripple effects became clear. Internal ACP (American Clean Power) memos revealed that Army Corps districts were taking "widely variable" approaches, with at least two districts refusing to issue jurisdictional determinations for wind or solar projects - even on private lands. This regulatory paralysis contributed to $7.7 billion in project cancellations in Q1 2025.

Partial Resumption (March 2025)

In March, BLM resumed solar, storage, and geothermal application reviews as part of a partial lifting of Trump’s original 60-day freeze on renewable energy authorizations on federal land. The Department of Internals’ stated “all-of-the-above” energy approach included oil and gas, coal, geothermal, solar, and strategic minerals. Wind permitting remained frozen.

BLM approved projects like EDF's 117 MW Sapphire solar-storage facility. However, severe staffing gaps persisted due to hiring freezes and uncertainty about IRA funding for permitting staff positions.

Modernization Efforts (April 2025)

April marked a potential turning point with several major developments:

1. The Presidential Memo on "Updating Permitting Technology" directs agencies to eliminate paper-based processes and create unified digital systems. CEQ (Council on Environmental Quality) must deliver its Action Plan by May 30, 2025.

2. Department of Interior announced plans to accelerate reviews: 14 days for Environmental Assessments (down from ~1 year) and 28 days for Environmental Impact Statements (down from ~2 years) for "energy emergency" projects.

3. Solar permitting has resumed more fully, although staffing gaps continue to cause delays that impact project financing and construction schedules.

Current State and Strategic Implications

As of the end of April 2025:

• 6 GW of fully permitted solar projects are under development, with another 10 GW awaiting permits

• Wind projects face continued uncertainty with no timeline for resuming approvals

• Agency staffing shortages remain the primary bottleneck despite procedural changes

Conclusion

Despite the challenges posed by tariffs and permitting roadblocks, our SF Climate Week dinner concluded with a sense of resolve and optimism. While policy turmoil creates uncertainty, the best-in-class developers are devising creative solutions and adopting contingency plans, while recognizing that the fundamental economics and urgency of the energy transition are undeniable.

Have permitting- or tariff-related changes impacted you as a developer, financier, or operator? Let us know.

If you’re a developer needing assistance with permitting and site diligence, let’s chat!