Storage system costs could rise 15% with escalation in US-China trade dispute: Report
The stalled trade negotiations between the United States and China could put a strain on America’s burgeoning energy storage market. President Donald Trump has used the threat of additional tariffs to get Beijing to the negotiating table. But the tactic has yet to produce the desired results.
On May 10, U.S. Trade Representative Robert Lighthizer announced the administration’s decision to increase tariffs on $200 billion worth of Chinese goods — including lithium-ion batteries and inverters — from 10% to 25%. While the latest tariff hike is not expected to stop the growth of the U.S. energy storage market, it’s expected to notably increase installation costs.
“The impact of the tariff would vary project by project, but we estimate a 25% tariff on both lithium-ion batteries and inverters could increase the installed prices for a four-hour duration battery by about 15%,” Felix Maire, clean energy and storage senior analyst at S&P Global Platts Analytics, said in a June 6 release.
It’s a significant price increase considering that lithium-ion batteries account for 40% to 60% of the total installed cost of a standalone battery storage system in the U.S., Maire added.
A recent USTR notice delayed the start date of the 25% tariff from June 1 to June 15, giving U.S. importers a further two weeks to get their goods into the country under the current tariff level of 10%. After the latest round of trade negations between the world’s two largest economies broke down in late May, Trump announced that tariffs on China could be raised by another $300 billion if necessary.