Solar panels are everywhere now. They cover warehouse rooftops in Arizona, stretch across flat fields in Texas and line the eaves of suburban homes from Georgia to Oregon.
Most Americans who look at one see a blue rectangle that turns sunlight into electricity. Very few see the five-step industrial supply chain hidden inside it, and fewer still realize that chain is now the flashpoint for one of the biggest trade fights in American energy history.
What a solar panel is actually made of, layer by layer
Start with sand. High-purity quartz sand is refined into polysilicon, the raw feedstock of the solar industry.
That polysilicon is melted and formed into cylindrical ingots, then sliced into thin wafers.
Each wafer is cleaned, textured, and treated to absorb sunlight, then sandwiched between layers with opposing electrical charges. Tiny conductive wires called “fingers” capture the resulting electricity.
Those finished cells are wired together, encapsulated in glass and plastic, framed in aluminum, and shipped as a module. That is five distinct stages before a single panel ever reaches a jobsite.
The upstream gap that US factories still cannot close
American assembly plants have grown fast. Yet the United States still imports the vast majority of its solar panels, with dependence concentrated on China and countries that serve as intermediaries for Chinese manufacturing.
The bottleneck sits at the top of that five-step chain. US module factories can cut and wire cells. What they largely cannot do at scale is make the wafers and cells themselves, which still flow overwhelmingly from China-linked producers.
That single gap is why roughly 84% of solar panel imports into the US during the fourth quarter of 2023 came from four Southeast Asian countries.
How a geography lesson became a billion-dollar workaround
The US has taxed Chinese solar products since 2012. So Chinese-linked manufacturers did something logical: they moved assembly lines to Malaysia, Thailand, Cambodia, and Vietnam.
The Commerce Department found in 2023 that manufacturers had operated in those countries to dodge tariffs on Chinese-made solar components, and imposed import duties accordingly.
Section 201 safeguard tariffs, initiated in President Donald Trump’s first term and extended by his successor Joe Biden, expired on February 6, 2026. Their expiration did not mean the industry got a reprieve. It meant a new and sharper mechanism had already been loaded and aimed.
The tariff rates that explain why a panel’s origin country now matters more than its wattage
On April 21, 2025, the US Commerce Department announced its final affirmative determinations in the antidumping duty (AD) and countervailing duty (CVD) investigations of crystalline photovoltaic cells from Cambodia, Malaysia, Thailand, and Vietnam, and the numbers were unlike anything the solar market had seen.
Combined AD and CVD exposure reached up to roughly 3,530% for Cambodia (125.37% AD plus 3,403.96% CVD), up to roughly 1,002% for Thailand (202.90% AD plus 799.55% CVD), up to roughly 814% for Vietnam (271.28% AD plus 542.64% CVD), and up to roughly 250% for Malaysia (81.24% AD plus 168.80% CVD), according to the Commerce Department’s final determination.
In its final affirmative determinations, the Commerce Department announced steep tariffs on solar cell imports, whether assembled into modules or not, from the four countries. The US International Trade Commission subsequently issued a final affirmative injury determination, triggering formal AD and CVD orders published in the Federal Register on June 24, 2025. That “whether or not assembled into modules” language closes the routing loophole: a cell made with Chinese polysilicon, pulled through a Vietnamese furnace, and shipped as a finished panel is now fully in scope.
A coalition of domestic manufacturers is already monitoring imports from India, Indonesia, and Laos, the next tier of alternative routing points.
What the new tariff layer means for solar prices and the buildout ahead
Solar panels now face multiple overlapping US import tariffs: AD/CVD duties, Section 301 China-specific tariffs, and FEOC restrictions on manufacturing tax credits.
Together these add roughly $0.05 to $0.15 per watt to imported panel costs. On an 8-kilowatt home system, that translates to about $400 to $1,200 added to the installed price depending on origin.
Critics including the Solar Energy Industries Association argue tariffs harm US assemblers by raising the price of imported cells. Domestic producers argue the opposite: without duties, subsidized foreign cells will keep undercutting investment in US cell-making capacity.
That tension is unresolved. The US solar buildout is adding gigawatts fast, and battery storage developers are planning a record 24 gigawatts in 2026 partly because so much solar is coming onto the grid.
The upstream supply chain question the tariff system is forcing into the open has no fast answer. US solar cell capacity has reached 3 GW even as module factories exceed 65 GW, a sign that closing the gap is underway, even if it is nowhere near finished.
The next time a panel goes up on a rooftop near you, the blue glass face hides five industrial steps, a decade of trade law, and a number, up to 3,530% for Cambodia, that is quietly rewriting where every one of those steps happens next.
