How Tariffs Impact the US Energy Transition
The cost of US energy storage systems has been rising ever since the new US administration entered the White House.
Sweeping new tariffs—notably a 104% duty (announced on April 9) on lithium-ion batteries imported from China—are slamming the brakes on one of the most important technologies in the clean energy transition: utility-scale battery storage.
Energy storage is the backbone of a renewable-powered grid
Clean energy sources like solar and wind are inherently intermittent—they don’t generate electricity when the sun isn’t shining or the wind isn’t blowing. That’s where grid-scale batteries come in. These systems store excess energy when production is high and release it during demand peaks, helping balance the grid and meet rising electricity demand. They’re the key to grid flexibility, reliability, and resilience in a decarbonised power system.
Tariff sends US battery costs back to 2023
The US still imports most of its large-scale batteries—about 70% of those imports come from China.
With these new tariffs, the cost of a four-hour battery system in the US has spiked to $322 per kilowatt-hour, a 55% average price increase from pre-tariff levels.
Even more concerning, these costs are now back to where they were in 2023, wiping out a year of cost declines that had been driving rapid deployment.
Delays, cancellations, and a stalled transition
Higher system costs will inevitably delay or cancel storage projects in the pipeline. Developers and off-takers, still bruised from the high prices of 2022–2023, will now have to reassess timelines, budgets, and even feasibility.
This comes at a time when the US grid is already under significant pressure. Electricity demand is rising—driven by everything from the proliferation of data centres to intensifying summer heat waves. The strain on infrastructure isn’t theoretical—it’s real, and it’s accelerating.
The US needs long-term energy storage solutions to ensure grid reliability regardless of weather. And for the world to stay within a safe ecological operating space, those systems must be deployed rapidly and at scale.
Innovation beyond lithium
Yet, this moment could also spark a broader shift. The US remains dependent on China for lithium iron phosphate (LFP) batteries—the most widespread chemistry for stationary storage. But now, next-generation alternatives like sodium-ion and iron-air, are being developed.
They’re not just alternatives to lithium—they’re a chance to build a more diversified, resilient, and geopolitically secure supply chain for the energy systems of tomorrow.
At Kieger, we continue to invest in technologies that will power a clean, secure, and affordable energy future.
