Environment

US energy storage costs could spike 50% – tariffs are to blame

US energy storage costs could spike 50% – tariffs are to blame

Trump’s tariffs are about to drive up the cost of clean energy projects in the US, and energy storage is set to take the biggest hit, according to new analysis from Wood Mackenzie.

In its latest report, “All aboard the tariff coaster: implications for the US power industry,” Wood Mackenzie lays out what the power sector could be in for as new tariffs raise costs across the board. The biggest tariff hit will be on utility-scale energy storage, where US projects still overwhelmingly rely on imported battery cells from China.

“In a business with 5-to-10-year planning cycles, not knowing what a project will cost next year or the year after is disruptive and causes massive uncertainty,” said Chris Seiple, vice chairman of power and renewables at Wood Mackenzie. “We will definitely see impacts on power sector capital projects. The severity depends on what scenarios play out.”

The firm modeled two scenarios: one where tariffs settle at an effective rate of 10% by 2026, and a more extreme “trade war” scenario where that rate climbs to 30% and stays there through 2030. Either way, energy storage takes a big hit.

Advertisement – scroll for more content

Wood Mackenzie estimates energy storage project costs could rise from 12% to over 50%, depending on the scenario. That’s because, in 2024, nearly all utility-scale battery cells used in the US came from China. And the domestic supply is nowhere near ready to take over.

“While US battery cell manufacturing capacity is expanding, it is not expanding at a pace nearly fast enough to meet even a small fraction of battery projects in the US,” Seiple said. “In 2025, we estimate there is sufficient domestic manufacturing capacity to only meet about 6% of demand, and by 2030, domestic manufacturing could potentially meet 40% of demand.”

The solar sector is getting a rough deal, too. With existing tariffs and tough interconnection rules already making solar builds more expensive in the US, new tariffs would pile on. Wood Mackenzie says utility-scale solar could end up 54% more expensive than in Europe, and a staggering 85% pricier than new solar plants in China.

“An increase in tariff levels will only worsen this premium US energy consumers need to pay to access renewable energy,” Seiple said.

Wood Mac’s bottom line: Current trade policies are making clean energy more expensive to build in the US than almost anywhere else, and the industry will have to brace for more uncertainty and higher costs ahead.

Read more: Audi may build EVs in the US to dodge Trump’s new tariffs


If you live in an area that has frequent natural disaster events, and are interested in making your home more resilient to power outages, consider going solar and adding a battery storage system. To make sure you find a trusted, reliable solar installer near you that offers competitive pricing, check out EnergySage, a free service that makes it easy for you to go solar. They have hundreds of pre-vetted solar installers competing for your business, ensuring you get high quality solutions and save 20-30% compared to going it alone. Plus, it’s free to use and you won’t get sales calls until you select an installer and share your phone number with them.

Your personalized solar quotes are easy to compare online and you’ll get access to unbiased Energy Advisers to help you every step of the way. Get started here. –trusted affiliate link*

FTC: We use income earning auto affiliate links. More.