Supply chain woes dim 2022 outlook for US solar

Solar system. Author: Oregon Department of Transportation. License: Creative Commons, Attribution 2.0 Generic.

December 14 (Renewables Now) - Wood Mackenzie's forecast for US solar deployments in 2022 has been reduced by 25% or 7.4 GW direct current (DC) as a result of logistics challenges and price increases in the supply chain, according to the latest US Solar Market Insight report.

The report, released on Tuesday by Wood Mackenzie and the Solar Energy Industries Association (SEIA), says that solar prices rose across all market segments for a second quarter running amid supply chain constraints, exacerbated by the recently dismissed petitions for anti-dumping and countervailing duties on solar cells from Malaysia, Thailand and Vietnam.

At the same time, the Build Back Better Act will boost the market. If passed, the legislation is expected to lead to 43.5 GW of additional solar above the baseline forecast between 2022 and 2026, helping the US reach more than 300 GW of cumulative solar capacity.

In the third quarter of 2021, the US installed 5.4 GW DC of solar, more than in any other third quarter, bringing its total installed capacity to 113.5 GW DC.

Utility-scale installations registered another third-quarter record at 3.8 GW DC, while residential solar installations topped 1 GW DC for the first time. Commercial and community solar declined compared to the second quarter of 2021.

According to the report, the utility-scale segment is the most affected by rising prices. National system prices for fixed-tilt and single-axis tracking projects have climbed 11.7% and 8.5%, respectively since the final quarter of 2020. Faced with equipment delays, increased equipment costs and contract negotiations, developers delay the start-up of many projects from 2022 to 2023 or later.

“The US solar market has never experienced this many opposing dynamics,” said Michelle Davis, principal analyst at Wood Mackenzie and lead author of the report. “On the one hand, supply chain constraints continue to escalate, putting gigawatts of projects at risk. On the other, the Build Back Better Act would be a major market stimulant for this industry, establishing long-term certainty of continued growth,” added Davis.

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Browse all articles from Plamena Tisheva

Plamena has been a UK-focused reporter for many years. As part of the Renewables Now team she is taking a keen interest in policy moves.

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