| Work Detail |
Stockpiling batteries can protect the energy storage sector from immediate crises, but time is running out, according to Clean Energy Associates. Tariffs remain at the center of the discussion about whats next for the U.S. energy storage market, as they continue to reshape project economics, according to Clean Energy Associates (CEA) first quarter 2025 Energy Storage Supply, Technology, Policy, and Pricing Reports. “With tariff rates of 145% and the possibility of additional tariffs, the effects are already being felt,” Daniel Finn-Foley, vice president of energy storage at CEA and one of the lead authors of the reports, told pv magazine . According to Finn-Foley, the combination of Section 301 tariffs and potential antidumping and countervailing duties on anode materials is forcing developers to reevaluate their market strategies. The total cost is more than double what we thought we would spend a few months ago, and the projects may no longer be profitable, he added. Although buyers are increasingly considering domestically manufactured batteries, there may not be enough to meet demand for stationary storage. Currently, 60 GWh of lithium iron phosphate (LFP) battery production capacity for stationary storage is planned in the United States through 2028. According to CEA estimates, about 46 GWh are likely to come online by then. “But annual demand in 2028 will be 100 GWh,” Finn-Foley said, “and there’s going to be a fight for developers to capture some of the supply that comes online, assuming these rates remain in place.” These domestic supply constraints will also lead some to seek alternative suppliers, he added, including those in South Korea, which is developing its own LFP battery production. This doesnt happen overnight, so some developers are seeking to limit their exposure to tariffs through partial domestic integration. Its cost-effective to import a cell from China and integrate it in the United States, Finn-Foley explained. According to Finn-Foley, even though tariffs are charged on the Chinese cells, the overall cost is likely to be reduced if the rest are purchased domestically. But, he warned, it is not possible to find complete solutions. The trade commissions have ruled that if a battery comes from another country and is placed in a different module, the country of origin will still be the one in which the battery was manufactured, he explained. Avoiding it will be difficult, he added. However, the industry has prepared for the tariffs. Finn-Foley said many companies imported and stockpiled batteries in the months leading up to the 2024 election. This is allowing many companies to circumvent the tariffs for the time being and keep their facilities operating as planned. Were going to be tapping into that reservoir for a while, but we dont know how long we can ride that wave, he said. That also depends on what happens in the next three months with tariffs. If so, how long will it last? he said, and the longer it goes on, the more likely market disruptions will be. Theres a tipping point, he said, where uncertainty leads to reduced buying. The market wont show infinite patience here. |
