Supply chain issues and trade barriers contributed to a 17% decrease of installed solar capacity year-over-year in the United States. According to the latest “U.S. Solar Market Insight,” released today by SEIA and Wood Mackenzie, the country installed 4.6 GW of solar in Q3 2022, the same amount it installed in Q2 2022 but less than what it installed one year ago.
Credit: Namaste Solar
Wood Mackenzie said detainments under the Uyghur Forced Labor Prevention Act (UFLPA) are depressing near-term solar installation forecasts and delaying the impact of the Inflation Reduction Act (IRA). The U.S. Dept. of Commerce’s recent decision to apply anti-circumvention tariffs on solar products from Southeast Asia presents downside risk to future solar deployment.
“America’s clean energy economy is hindered by its own trade actions,” said SEIA president and CEO Abigail Ross Hopper. “The solar and storage industry is acting decisively to build an ethical supply chain, but unnecessary supply bottlenecks and trade restrictions are preventing manufacturers from getting the equipment they need to invest in U.S. facilities. In the aftermath of the IRA, we cannot afford to waste time tinkering with trade laws as the climate threat looms.”
The residential solar segment, as it is less directly impacted by existing trade issues, saw 1.57 GW of new installations in Q3, marking a 43% increase over Q3 2021.
“Installations this year were significantly depressed due to supply chain constraints” said Michelle Davis, principal analyst and lead author of the report. “It has proven more difficult and time-consuming to provide the proper evidence to comply with the UFLPA, further delaying equipment delivery to the U.S.”
Forecasts from Wood Mackenzie find that the UFLPA will limit solar deployment through 2023 and mute the impact of the IRA in the near term. The report forecasts the utility-scale solar market to add 10.3 GW of new capacity in 2022, representing a 40% drop from 2021 volumes. By 2024, IRA-fueled growth will begin in earnest, with annual solar growth averaging 21% between 2023 and 2027.
Even as supply chain constraints slowed the market, solar accounted for 45% of all new electric generating capacity additions through Q3 2022, the most of any electricity source.
News item from SEIA
The take away here is geopolitics brought about as a result of “globalization” in the energy sector has brought about this road block that does not need to be in place. When one invokes 201 tariffs specifically on the (largest) foundry of poly silicon in the World supply chain, you have just shot yourself in the big floppy clown feet of the geopolitical ploy. One might save something like 3,000 to 4,000 jobs in a solar PV manufacturing plant in the U.S., but loses momentum in the flow of solar PV panels needed to reach decarbonization goals and puts thousands of solar PV installation personnel out of work when companies big and small “wait” for things to calm down and customers come back for the systems they would have installed without the restrictive more expensive tariffs. As it is now China can invoke a regional Covid-19 shutdown and isolation period and stop production of their silicon foundries to starve the solar PV cell market and slow or stop the solar PV panel manufacturing market. From the start of the Trump administration 201 tariffs on Chinese solar PV panels and materials, the two companies that filed the complaints of Chinese panel dumping in the marketplace have filed bankruptcy and between both lost something like 4,000 employees combined. The SEIA has said from 80,000 to around 120,000 solar PV installers and ancillary personnel were out of a job and Covid-19 didn’t help in the mass reduction of the workforce. So tariffs have cost overall 84,000 to 124,000 jobs that would be (tax paying jobs) save NO manufacturing jobs and prove tariffs can create a 21:1 to a 31:1 job loss with higher costs per solar PV panel installed in the U.S..