Polysilicon Proclamation: Understanding the Impacts to the Solar Supply Chain
On August 6, 2026, President Trump signed a presidential proclamation (link) imposing tariffs and minimum prices on imported polysilicon and its derivatives—including silicon wafers, solar cells, solar modules, and semiconductors—under Section 232 of the Trade Expansion Act of 1962. The action follows a Section 232 investigation initiated by the U.S. Department of Commerce on July 1, 2025, which examined U.S. dependence on foreign sources of polysilicon and the national security implications of concentrated overseas supply chains.
Key Takeaways
Imported solar modules, cells, and wafers will face new tariffs and price floors, increasing costs for U.S. solar projects.
The action is not limited to Chinese-origin products; imports regardless of country of origin could be affected.
Domestic polysilicon and wafer manufacturers may benefit, but near-term supply gaps remain given current U.S. capacity limitations. However, increased project costs may lead to reduced pipelines and project cancellations.
Utilities and offtakers will continue to suffer increased prices as regulatory uncertainly and government-directed inflation continue to drive up electricity prices.
Project developers, EPC contractors, and lenders should immediately review tariff reopener provisions, supply contracts, and financing models.
Final implementation details are pending publication of implementing guidance by CBP and Commerce.
Summary Impacts
The proclamation (including its attached Annex I and Annex II) establishes the following new tariffs and minimum import prices (MIP) on polysilicon and its derivatives:
A 15% ad valorem tariff on all imports of polysilicon derivatives;
$21 per kilogram MIP for polysilicon (See Annex I);
$100 per kilogram MIP for polysilicon ingots and wafers (See Annex I);
$0.22 per watt MIP for solar cells (See Annex I); and
$0.38 per watt MIP for solar modules (See Annex I).
> 15% Tariff
All polysilicon ingots and polysilicon derivatives imported on or after December 4, 2026 will be subject to an additional 15%, Section 232 tariff. The tariff and MIP program derive from national security concerns and Commerce’s Section 232 Investigation on Imports of Polysilicon and Its Derivatives (initiated July 1, 2025). The proclamation aligns tariffs on certain trading partners to total 15% of the affected products, and adjusts the new tariff to10% for products of the UK.
> MIP Program
The MIPs listed above may be adjusted by Commerce from time to time to reflect market conditions, and apply with respect to imports on or after December 4, 2026. Each importer of records may provide documentation or certificate established that either (1) the first arm’s length sale of the imported products will occur at or above the applicable MIP, or (2) that the first arm’s length sale of the imported products is pursuant to fixed terms entered into prior to August 6, 2026. If such documentation shows an entered value less than the applicable MIP, the importer must pay a tariff equal to the difference in value between such lower price and the MIP.
For example, if a developer entered into a module supply agreement for non-domestic solar modules at a price of $0.25/watt, and those modules were imported to the United States on or after December 4, 2026, then the importer of record must supply the required documentation and pay a tariff equal to the difference between $0.38/watt - $0.25/watt = $0.13/watt of imported Modules. This MIP tariff amount would be in addition to the 15% tariff noted above.
The U.S. Customs and Border Protection (“CBP”) determines the importer’s documentation was materially inaccurate or failed to comply with its certifications, that importer and its affiliates shall be subject to potential penalties and be permanently barred from importing polysilicon and polysilicon derivatives into the United States.
The proclamation also authorizes Commerce to establish an onshoring program to move polysilicon production to the United States. Broadly, this requires manufacturers to submit on-shoring plans to Commerce and requires that construction of any new, refurbished or expanded domestic manufacturing start by January 20, 2029. The on-shoring plans require the approval of Commerce (in consultation with senior executive branch officials), and if approved Commerce may allow certain imports to avoid paying the applicable 232 duties. Any onshoring plans are subject to ongoing review and enforcement, and in cases of fraud or where the United States Government is deliberately misled, the tariff benefits may be removed, applied retroactively and additional fines and penalties may be assessed.
Additionally, if trading partners establish substantially equivalent MIPs for the products, Commerce has the power to alter the applicability of the MIPs and tariffs for such trading partner.
> Stockpiling
The proclamation includes anti-stockpiling restrictions. Specifically, the Commerce, in coordination with CBP, is authorized to restrict imports by any importer and its affiliates found to be stockpiling polysilicon or polysilicon derivatives prior to December 4, 2026.
Market Impacts and Next Steps
Already our clients are reevaluating project models and pipeline plans. Early movers on module supply are rewarded, and delayed module supply plans may prove fatal for many projects. By now, most players in this market have gone through the exercise of evaluating their change in law and tariff risk. This proclamation requires project developers, owners, operators, and financing parties to revisit (1) all change in law and tariff terms in PPAs, EPCAs, and Supply Agreements, and (2) purchase price assumptions and adjustors in M&A agreements, to assess project or portfolio-wide exposure.
We will continue to monitor these developments and provide updates as they emerge.
Need specific guidance on how to protect your supply chain, procurement strategies, and financing arrangements?
Janny Gandhi, Attorney
Gary Stapleton, Partner
Karleen Stern, Partner
Zach Crowley, Partner
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