Jakarta—Recent United States (U.S.) tariffs on Southeast Asian solar panels are likely to adversely impact most solar photovoltaic (PV) exports from Malaysia, Thailand, Vietnam, and Cambodia. To respond, regional solar panel producers may have to refocus on regional markets.
On 21 April 2025, the U.S. Department of Commerce announced tariffs of up to 3,521% on solar imports from Southeast Asian countries, threatening the export-oriented strategies of regional clean energy manufacturers.
The U.S. International Trade Administration (ITA) announced the conclusion of its investigation regarding alleged product dumping by solar manufacturers in Cambodia, Malaysia, Thailand, and Vietnam.
Anti-dumping and countervailing duty tariffs were levied on over 30 companies, ranging from around 14% to over 3,400%, with an average of 870%. Without ITA intervention, the specific tariffs on individual solar technology exporters in Thailand, Malaysia, Cambodia, and Vietnam will take effect on 09 June 2025.
Grant Hauber, senior analyst at the Institute for Energy Economics and Financial Analysis (IEEFA), said in its research report that while currently robust U.S. demand for solar products could support some increased import costs, any price increases beyond 250% would make most Southeast Asian imports untenable.
U.S. policy shifts highlight the need for Southeast Asian countries to diversify their energy mixes and maximise the local installation of renewable energy projects. This approach can help hedge against market-driven shocks, such as fluctuations in USD-denominated commodity prices and currency exchange rates, while protecting local jobs and economies.
“The disruption also presents an opportunity for Southeast Asian renewables manufacturers to readjust toward rapid renewables adoption in domestic markets rather than focusing on exports to the U.S.,” Hauber said.
The ITA trade measures are to be applied on top of already proposed general tariffs that the U.S. administration announced on 02 April 2025. While these tariffs are temporarily on hold for 90 days, the risks of relying primarily on exports to the U.S. for growth are clear for Southeast Asian producers, who should take immediate steps to diversify their end markets.
Before the current trade uncertainty, Southeast Asian countries had already set targets for diversifying energy sources through large renewable energy additions. Indonesia, for example, has targeted 75 GW of solar energy by 2040, adding 5 GW per year. However, there is no need to wait that long given volatile market-based fossil fuel prices.
China installed solar farms at a rate of 759 MW per day in 2024, demonstrating that large quantities of renewables can be added to the grid in months. These investments accounted for 10% of the country’s GDP growth that year. This indicates the potential of renewable energy to insulate countries from global market shocks while helping to utilise the renewable technology outputs created locally.
Solar and wind technology costs have continued to decline, with battery storage technology joining that trajectory. Renewables are the lowest-cost solution for every Southeast Asian country, particularly where utilities are trying to meet new, incremental demand, IEEFA said.
Absorbing displaced green tech demand within SE Asia
Grant Hauber wrote that displaced U.S. demand for green tech output from Southeast Asian countries could be absorbed domestically and regionally. However, proactive, incentivised policies are needed to maximise the domestic installation of renewable energy projects.
Indonesia lags behind the most, with solar making up only 0.2% of its total energy. Vietnam, the Philippines, Malaysia, and Thailand have also struggled to increase their renewables output for different reasons.
Vietnam seems most prepared to use renewable energy to meet rapidly growing electricity demand. In addition to higher revised solar and wind targets, its new electricity law and implementing decrees encourage renewable development as part of the base national energy mix.
On 15 April 2025, Vietnam revised its national power development plan, proposing to serve its growing energy needs by advancing its solar capacity target from 34 GW to 73 GW by 2030 and up to 296 GW by 2050.
The Philippines is planning for its fourth round of bidding for renewable energy projects around mid-2025, aiming to add more than 9 GW of capacity. The first two rounds, held in 2023, awarded 5.5 GW of capacity, and the third round, completed in February 2025, attracted 7.5 GW of proposals, exceeding the 4.5 GW government target.
However, there have been issues in completing these projects. The country’s complicated policy environment for securing grid interconnections has led to several awarded projects being cancelled or indefinitely delayed.
Malaysia’s recent National Energy Transition Roadmap establishes sustainability targets but does not include firm, supporting commitments to capacity or generation from renewables in the medium term.
The country’s plans lean more toward false solutions like carbon capture, utilisation, and storage (CCUS), which allow for the continuing monetisation of fossil fuel deposits. However, the target is to achieve 153 GW of installed solar by 2050. Given recent tariff changes, these plans could be accelerated.
Thailand depends primarily on natural gas, whether domestically produced, piped from Myanmar, or imported as liquified natural gas (LNG). However, with the reemergence of political turmoil in Myanmar, deliveries will likely erode as investment in new fields is suspended. Domestic gas supplies in the Gulf of Thailand are also declining, leaving the country highly exposed to USD-denominated LNG markets.
The Thai government is making plans to diversify its energy mix, and solar appears to be the most efficient solution, with 15.5 GW targeted to be operational by 2037 and 76 GW by 2050.
Diyanto Imam, Director of NEX Indonesia, said in recessary.com that although few Indonesian startups export directly to the U.S., their products rely heavily on low-cost imported components—solar panels, batteries, inverters, and controllers. With the countries producing these components now caught in the crossfire of U.S. tariffs, startups face rising prices, delayed deliveries, and growing uncertainty.
Insulating regional economies by transitioning from fossil fuels
The unexpected U.S. policy changes have left Southeast Asian businesses scrambling for more diversified markets. The impact of these shifts could expose or create economic weaknesses for each nation. At the same time, modern renewable technology production facilities will need to find new markets for their goods.
“By prioritising the domestic use of green technology already produced within their borders, Southeast Asian countries can protect investments and jobs. Transitioning from volatile, USD-denominated fossil fuel and financial markets to local renewable energy offers a quick and cost-effective way to shield Southeast Asian economies from future uncertainty,” Hauber said. (Roffie Kurniawan)
Banner photo: NEX Indonesia
