By 2035, rising global tariffs could negatively impact photovoltaic (PV) and battery energy storage system (BESS) installations in the United States and European Union, potentially reducing capacity by up to 10%.
A scenario-based analysis by global consulting firm McKinsey suggests that escalating global tensions among the US, EU, and China could decrease US solar PV installations by 9%, while EU solar PV installations may drop by 7%. In a worsening trade environment, Europe’s BESS installations could decline by as much as 10%.
The report’s high-impact scenario assumes:
- The US imposing 60% tariffs on all Chinese imports and 20% tariffs on imports from other countries
- The EU levying 47.7% tariffs on Chinese solar modules and batteries
Notably, this scenario doesn’t account for other factors, particularly the significant reduction in US renewable energy subsidies announced earlier this month.
