Trump’s sweeping global tariffs may be on hold for 90 days, but that’s not giving clean energy developers — even the large ones — much confidence about what’s going to happen next.
OCI Energy, a subsidiary of South Korean conglomerate OCI Holdings, is a Texas-based utility scale developer of solar and storage projects. Another OCI subsidiary, Mission Solar, manufactures solar panels in San Antonio, and sources its polysilicon for solar wafers from yet another subsidiary operating in Malaysia and Korea.
And yet, despite the fact that OCI’s solar supply chain is largely independent of China, its Texas developer arm is still feeling the impact of tariffs, said president Sabah Bayatli.
In the longer term, meaning 2027 and beyond, tariffs aren’t generally a major issue for developers, Bayatli said: “Once the market settles and understands the tariffs, basically everything will be baked into your reported capex, and something needs to pay for it, which is your offtake pricing.” In other words, consumers ultimately pay higher energy prices.
However, tariffs pose a short-term development problem. For a developer actively financing projects, it’s important to lock in things like capex, EPC contractors, battery supplies, and budgets as soon as possible. “Once you get those, you get the offtake agreement based on your capex,” Bayatli explained. Then, once “you have a good package with a financial model, you go to the lender and you start financing.”
That’s where the tariff problems come in. At the moment, developers can’t lock in pricing, and therefore the financing process faces delays.
OCI Energy has two projects currently at the financing stage, both located in Texas. One is a 700-megawatt-hour battery storage system, the other is a 350-MW solar farm.
The company was essentially lucky in terms of timing in that it hadn’t sourced equipment for those two projects yet when the tariffs came into effect, Bayatli said. “We are still shopping around,” he explained. “And I think we have a better position than somebody already locked in a contract.”
OCI is working on a “shortlist” of suppliers based on the “menu” of tariffs, then calculating based on a supplier’s exposure under the worst-case scenario — which is that tariffs go back into effect after the 90-day pause.
Bayatli said many developers are eyeing PV manufacturing in regions like the Middle East, particularly Turkey and Jordan. Some manufacturers are also exploring Egypt as an option, he added.
“You go through these countries and see what tariffs they are exposed to down the road, and some of these guys could be at the 10% level, so maybe they’re good countries to explore,” he said.
And after the tariff considerations are dealt with, there are also questions about quality and execution to take on. “You’re also keeping an eye on the major suppliers who are supplying modules from the main countries like Vietnam and Malaysia and Thailand, and [trying to understand] what things will look like in July,” Bayatli said.
All of those complex, moving pieces, he added, mean there’s likely to be delays in the final selection of equipment for projects — and many contracts won’t get finalized until there’s more certainty.
