US Solar Manufacturers to Shift Focus to Domestic Market Amid Tariff Uncertainty

US Imposes 126% Duty on Indian Solar Imports

February 25, 2026

The US Commerce Department has set a preliminary countervailing duty (CVD) of 126% on solar cells and modules imported from India, citing government subsidies as a reason for the decision. This move is expected to disrupt Indian solar exports in the near term, prompting manufacturers to focus on domestic capacity and diversify their markets.

Impact on Indian Solar Stocks

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Indian solar stocks experienced a sharp decline of up to 15% in intra-day trade following the announcement. However, industry players remain confident that the companies will weather the storm. Waaree Energies, a leading solar PV modules manufacturer, has stated that it does not anticipate any material adverse impact on its ability to service its US order book. The company is committed to expanding its localized manufacturing in the US and diversifying its supply chain to build resilience.

Domestic Capacity and Diversification

Waaree Energies has been strengthening its US-based manufacturing footprint, with an aggregate module manufacturing capacity of approximately 2.6 GW. The company is in the process of expanding its capacity to 4.2 GW by the end of the current fiscal. Emmvee Photovoltaic Power, another top manufacturer, has also stated that its integrated solar cell and module manufacturing is primarily aligned with domestic demand, with domestic sales contributing 99.13% to revenue in FY25.

Analyst Views

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Analysts expect additional duties and stricter compliance requirements to affect price competitiveness and shipment schedules of companies exporting to the US in the short term. Ankit Jain, vice president & co group head, corporate Ratings, ICRA, stated that the proposal by the US commerce department to impose countervailing duties will likely dampen export volumes from India, potentially exerting pricing pressures on domestic original equipment manufacturers (OEMs) and impacting the profitability of solar module manufacturers.

Background and Next Steps

The imposition of duties by the US follows an investigation based on a petition filed by the Alliance for American Solar Manufacturing and Trade in July 2025. Similar probes were also launched against Indonesia and Laos. The matter remains subject to ongoing regulatory proceedings, with a final outcome expected by July 2026.