SEIA and Wood Mackenzie issued a call to the federal legislature to move quickly to pass climate and clean energy policy. The US solar industry is facing supply chain challenges, trade actions, and legislative uncertainty. Wood Mackenzie said prices have increased as much as 18%, slowing deployment.
As much as a third of all utility-scale solar capacity scheduled to activate in Q4 2021 was delayed by at least a quarter, and 13% of projects planned for 2022 will be delayed for a at least a year, or have been cancelled altogether, according to SEIA and Wood Mackenzie. These pressures have led Wood Mac to lower its near-term solar forecasts by 19%, or 11GW.
Without significant policy support, including a long-term extension of the federal investment tax credit (ITC), Wood Mac said the US may only achieve 39% of its target of a carbon-free power sector by 2035.
After multiple rounds of slashing the total cost of the Build Back Better bill, US senators remain locked in negotiations. Senator Joe Manchin (D-WV) voted against an earlier proposal, shocking many, and has now said he will reopen negotiations “starting from scratch.” For now, the nation awaits resolution in what would be the most significant climate and energy legislation in US history.
“In the face of global supply uncertainty, we must ramp up clean energy production and eliminate our reliance on hostile nations for our energy needs. Policymakers have the answers right in front of them: if we pass a long-term extension of the solar Investment Tax Credit and invest in U.S. manufacturing, solar installations will increase by 66% over the next decade, and our nation will be safer because of it. America’s energy independence relies on our ability to deploy solar, and the opportunity before us has never been more obvious or urgent.” SEIA CEO and president Abigail Ross Hopper
Ten-year forecasts from Wood Mackenzie show that passing a long-term extension of the ITC, manufacturing tax credits, and other key clean energy incentives could increase installations by 66%. The group estimates an additional 20GW of US manufacturing would be added with supportive policy. Earlier proposals of the Build Back Better Act contained significant incentives for solar modules, trackers, inverters, and more.
In an interview with pv magazine, module producer Maxeon said that it is considering a 3GW cell production plant in the US, but is waiting on a Title XVII loan from the Department of Energy, and the passing of Sen. Jon Ossoff’s (D-GA) Solar Energy Manufacturing for America Act. If passed, the company said it could begin producing cells in the US as soon as 2023.
Wood Mackenzie estimates 10-year growth under a long term ITC would be 86% for utility-scale solar, 20% for residential solar, and 15% for commercial/community and other non-residential solar. Solar capacity additions could exceed 70GW by 2030 under this growth projection.
“The supply chain constraints of the last year will hit 2022 installations the hardest, reducing capacity by 7% compared to 2021,” “But our forecasts demonstrate long-term growth will overshadow these short-term challenges, especially if federal clean energy incentives are passed. In our ITC extension scenario, installed solar capacity is expected to multiply six times by 2032.” Michelle Davis, principal analyst at Wood Mackenzie
Despite uncertainty in policies like net energy metering (NEM), and the headwinds affecting all solar sectors, residential solar grew 30% year over year, reaching nearly 24GW of new installed solar capacity. California, which represents half of the nation’s rooftop solar market, is awaiting results on a reworked NEM 3.0. Earlier proposals of NEM 3.0 slashed solar value aggressively enough to cause Wood Mackenzie to drop its deployment projections in half for the state. The decision has been delayed indefinitely, thanks to advocacy efforts by groups like SEIA and the protest of thousands of Californians.
This content is protected by copyright and may not be reused. If you want to cooperate with us and would like to reuse some of our content, please contact: firstname.lastname@example.org.