US Solar Costs Jump by $5 Billion for 500 GW as Iran War Lifts Aluminium 15%
Updated
Updated · Reuters · May 27
US Solar Costs Jump by $5 Billion for 500 GW as Iran War Lifts Aluminium 15%
2 articles · Updated · Reuters · May 27
$5 billion in added costs could hit 500 GW of planned solar buildout as aluminium shortages tied to the Iran war raise U.S. installation expenses, especially for racking systems.
Aluminium prices on the LME have climbed 15% since late February and COMEX futures more than 30% after Gulf refining damage and Strait of Hormuz shipping disruptions squeezed supply.
Racking selling prices are already up about 20% across projects, and analysts say marginal developments with thin returns could be delayed or dropped as mounting equipment gets costlier.
U.S. developers are still expected to add 43.4 GW of utility-scale solar in 2026, up 60% from last year, but higher aluminium costs may erode profitability and reach customers in Q3 and Q4.
With the Strait of Hormuz blocked, can the U.S. solar industry find new material sources before projects are cancelled?
As solar costs surge, will AI giants abandon clean energy goals for cheaper power sources like natural gas?
Could the aluminum crisis spark a shift to radically new, metal-free materials for building future solar farms?
How a 15% Aluminium Price Spike in 2026 Risks Slowing US Solar Growth and Clean Energy Goals
Overview
Since early 2026, global aluminium prices have surged due to escalating geopolitical tensions, especially the conflict in Iran. This crisis exposed the Western world's heavy reliance on Middle Eastern aluminium smelters, making buyers vulnerable to regional instability. At the same time, China, the largest aluminium producer, keeps its output limited to control emissions and avoid overcapacity. This means any supply shock quickly drives prices higher. As a result, the US solar industry faces rising costs, threatening project viability and slowing clean energy progress. The situation highlights the urgent need for stronger domestic production and smarter supply chain strategies.