The US installed 5.4GW of solar power plant on a direct-current basis to set a third quarter record but escalating supply chain constraints and costs across all market segments will depress installations by 25% over the next 12 months, according to the Solar Energy Industries Association (SEIA).
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New capacity was 33% above a year earlier when the industry began recovering from Covid-19 dislocations that most affected residential as well as utility PV, the main drivers of solar growth in the country.
The US installed 15.7GW through three quarters, “on pace to easily exceed 20GW” this year, which would surpass the record 19.2GW in 2019, wrote the authors of US Solar Market Insight, jointly released by SEIA and research group Wood Mackenzie.
“The US solar market has never experienced this many opposing dynamics,” said Michelle Davis, lead author and principal solar analyst at WoodMac. “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,” she added.
The report cites solar industry veterans asserting that equipment procurement and pricing for projects currently under development are “by far the most challenging they’ve ever experienced”, as US inflation in November rose 6.8% from the same month a year ago, the fastest pace in 39 years.
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The industry’s long-running overreliance on component imports from Asia has been fully laid bare this year. Utility PV is suffering most as only 20% of modules used in projects are manufactured in the US. This segment accounted for 64% of third quarter installations.
“I can verify that it is not only us, but other developers have numerous projects out there that have racking in place with no solar panels that are sitting on top,” Art Fletcher, executive vice president construction and head of procurement at Invenergy, a leading US solar and wind developer, stated at American Cleanpower’s annual conference last week.
“Supply chain issues extend from one end of the portfolio to the other,” he said, noting that Invenergy is creating more jobs than at any time in its history given strong demand for clean energy. “It becomes a challenge. It has …….