The sweeping tariffs announced Wednesday by President Trump could prevent the use of the huge batteries that energy companies are increasingly installing, in order to utilize more wind and solar power to make the wider electric grid more reliable.
Over the past five years, grid batteries have become one of the largest growing industries in the US energy sector. In states such as Texas and Arizona, businesses have installed stacks of lithium-ion cells that are the size of shipping containers. They can absorb excess wind and solar energy and store it when it is needed. In California, using batteries to store solar power in the evening hours helped the utility reduce the amount of natural gas burning.
However, according to Bloombergnef, the majority of US lithium-ion batteries are still imported, with 69% of these imports coming from China in 2024. Trump's latest tariffs, when combined with previous trade moves, will impose a 64.5% tax on grid batteries from China, rising to 82% next year.
“This narrows down the deployment of US energy storage,” Jason Burwen, vice president of policy and strategy for battery developer Gridstor, wrote in a social media post. “Bad for business, bad for grid reliability.”
According to the U.S. Energy Information Agency, the energy company was expected to install a record 18,200 megawatts this year, enough to store 18,200 megawatts of grid battery capacity to hours or hours. Together, batteries, wind and solar power were expected to account for 93% of the capacity added to the grid.
These batteries help you deal with the biggest weaknesses of renewable energy. The fact that wind and sun are not always available. In states that rely heavily on solar power generation, such as California and Texas, the battery installation boom has helped reduce the risk of blackouts by working with gas plants to power them when demand spikes during the hot summer months.
But batteries don't just help add renewable energy. The utility is also used to smooth out small disruptions in the power flow if the power plant unexpectedly trips offline. Alternatively, you can use them to reduce congestion on the transmission line.
With the price of lithium-ion technology falling sharply, companies are primarily installing grid batteries (the batteries found in electric vehicles are similar to batteries). Tariffs could reverse that trend.
“Batteries are the only major clean high-tech sector that imports remain overwhelmingly popular from China,” said Antoine Vagneur-Jones, head of trade and supply chain at Bloombergnef. “Therefore, the impact of these tariffs will be much greater for batteries than for other technologies.”
In recent years, the US has begun building a domestic battery supply chain. After the 2022 Inflation Reduction Act was passed, Biden administrators poured billions of dollars into new battery plants, providing tax credits for both domestic manufacturers and battery use in both grids and electric vehicles.
But many of these factories face an uncertain future as Congressional President Trump and Republicans are trying to roll back various clean energy policies.
Vagneur-Jones said it's complicated to vent the exact impact of tariffs on the energy mix. Nowadays, batteries often compete with natural gas plants as a technology to fill the gaps left by wind and solar power fluctuations.
However, it is not always that easy for many utilities to increase their gas use. New gas turbines have a long global backlog, and companies looking to build new gas plants from scratch today may have to wait until 2030 or later. The oil and gas industry is also damaged by new tariffs on steel and aluminum. This can affect the power transformer from the steel pipes used to line up new gas wells.
“It's always appealing to say that these tariffs are good for fossil fuels and bad for clean energy,” Vagneur-Jones said. “But I think that's a bad thing for everyone.”
