US-China Tariffs to Raise BESS Costs by 11-16%, but Demand Impact Expected to Remain Limited

New US-China tariffs are set to increase BESS costs by 11-16% but their impact on demand is expected to be ‘limited’, according to Clean Energy Associates (CEA). The general tariff on Chinese lithium-ion batteries will increase from 10.9% to 28.4%. This will raise costs for US system integrators using China’s batteries by an additional 11%. Cost increases will be higher for those who add less value in the US. While the cost increase may affect some projects with marginal returns, CEA expects the overall demand contract to be ‘limited’. The move comes after a period of sustained price falls for BESS and battery cells from China, which have made marginal projects economically feasible globally. CEA also commented on new guidance from the US Treasury regarding the domestic content adder to the investment tax credit (ITC) for clean energy generation and energy storage projects.