ESN Premium speaks with Senior Director of Strategic Sourcing at Anza Renewables, Ravi Manghani on current challenges energy storage developers are facing, including the US reciprocal tariffs and future of the Inflation Reduction Act’s Investment Tax Credits.
The energy storage industry is currently facing multiple challenges that developers need to consider when planning for successful energy storage deployments.
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Arguably most pressing is US president Donald Trump’s ‘Liberation Day’ tariffs, which, as reported by Energy-Storage.news, will double the price of batteries and battery energy storage systems (BESS) imported from China to the US.
Leading up to the announced tariffs, there was industry-wide movement of BESS manufacturers to countries that would either avoid or see a lower tariff.
However, the announcement saw a 46% tariff on Vietnam, 36% on Thailand, 32% on Taiwan, 49% on Cambodia, 24% on Malaysia and 32% on Indonesia.
China was hit with a new 34% tariff, on top of the 20% Trump announced, in two separate incremental 10% announcements.
Since the tariffs were announced, China has announced retaliatory tariffs in response. Donald Trump has said that these tariffs will be met with a 104% counter tariff on imports from China.
If the 104% tariff goes into effect, this would mean that batteries and BESS from China would be subject to a 186% tariff from 1 January 2026.
In addition to tariffs, developers are also having to consider the uncertain future of the Inflation Reduction Act’s (IRA) Investment Tax Credits (ITCs).
Upon taking office, Donald Trump issued the “Unleashing American Energy” executive order, which targeted Biden-era clean energy policies.
This involved a continuous assessment of both government agencies and funds that would support US cell procurement and manufacturing. The full implications of this order are still unknown and there remains a real potential for ITCs to be phased out.
There is a lot of uncertainty and additional costs for developers to consider in the face of rising energy demands.
Energy-Storage.news: In light of the recently announced tariffs, how can developers mitigate tariff risks through sourcing?
Ravi Manghani: Domestic sourcing remains the lowest-risk option at this time. With BESS manufacturing still heavily reliant on Chinese materials, finding non-Chinese materials will be critical to avoid the high reciprocal tariff in addition to the Section 301 tariffs already in effect and set to increase.
For 2026+ deliveries, several suppliers will have Southeast Asian manufacturing capabilities, which while facing reciprocal tariffs ranging from 24% to 46%, may still be a better option than China-based suppliers.
US and non-Chinese capacity ramp-up will take several months and for projects with immediate product needs, Anza’s sourcing team is helping our customers quantify counterparty risks and prospect viable options.
How do the tariffs change previous strategies or present new issues for developers?
So far in 2025 prior to the April reciprocal tariff announcement, many storage suppliers have held steady on pricing despite the new China tariffs due to the overcapacity throughout the supply chain.
As suppliers fully incorporate the new tariffs into pricing, we’re anticipating increases on energy storage system prices in the near term.
In terms of strategy, now more than ever, it’s crucial to have visibility into the entire supply chain and keep a close eye on how pricing is trending when planning developments and procurements.
Knowing product manufacturing location, timelines, terms available from a supplier, and how pricing stacks up against the rest of the market can make a massive difference between locking in the best deal possible and being stuck with unexpected counterparty risk.
In terms of project announcements, we’re seeing increased activity in states where we typically don’t see much activity. Do you think this could be related to tariff concerns or the ITC potentially being removed?
These regions are starting to see more storage projects because they have high solar installation rates, and storage adds flexibility to grid operations.
However, the pace is slower in these areas compared to states like California or Texas, where there are clear incentives for storage.
The uncertainty around tariffs, ITC, and other policies is affecting investment decisions. In states without strong incentives, these risks weigh heavily on project developers.
The potential loss of ITC would add 30% to project costs, which is a huge factor for developers in these regions.
Developers are waiting for clarity on issues like ITC and potential tariffs. Unlike in major markets where the benefits of energy storage are clearer, in these emerging markets, uncertainties are delaying project commitments.
What are your thoughts on the rise of domestic storage manufacturing, and what does it mean for the market?
We’re definitely seeing increased domestic manufacturing in energy storage. Some manufacturers have always focused on energy storage, while others, traditionally focused on the EV sector, are now pivoting toward storage due to the slower-than-expected growth of the EV market.
With the growing demand for energy storage and favourable market conditions, battery manufacturers are diversifying their customer base. This has led to more announcements of domestic manufacturing facilities.
That said, some concerns remain, particularly around the impact of policies like the 45X credits, which incentivise domestic manufacturing.
Many of the companies announcing domestic facilities have ties to China, and there have been talks about limiting 45X access for Chinese-owned companies.
How these policies evolve will affect the future growth of domestic manufacturing, but overall, we’re seeing more investment in the energy storage supply chain.
