U.S. Solar Industry Braces For Slump In New Capacity

The U.S. solar energy industry has warned it is facing a substantial slowdown in capacity additions due to persistent supply chain problems and the danger of import tariffs on low-cost solar panels coming in from Southeast Asia.

Reuters cited one industry player, Southern Co., as saying that close to 1 GW of new capacity additions would be delayed by a year because of the challenging business environment.

The tariff affair that has made imported panels more expensive is only part of the import problem. The other part is an investigation launched by the federal government into tariff circumvention, which had made the supply of panels tighter, Utility Dive reported this week, citing the director of origination for National Grid Renewables, Dan Rodriguez.

The investigation is looking into whether Chinese solar panel companies are using production facilities in Southeast Asia to circumvent U.S. tariffs on China-manufactured panels.

As a result of these problems, the prices of power purchase agreements for renewable energy from solar farms have soared. Per the Utility Dive report, average prices are now 24 percent higher than they were at the start of 2021, and while part of the reason for the increase was higher demand for this sort of energy, the other part had to do with policy-related uncertainties, and rising commodity and transportation prices.

Because of all these challenges, solar capacity additions this year and next will be 46 percent lower than previously planned, the Solar Energy Industries Association warned this week. This equals some 24 GW in capacity.

“If tariffs are imposed, in the blink of an eye we’re going to lose 100,000 American solar workers and any hope of reaching the President’s clean energy goals,” said SEIA president and CEO Abigail Ross Hopper.

“This would be a monumental loss for our nation, which has the potential to lead our clean energy future, with the right policies. Instead, the Commerce Department is on track to wipe out nearly half of all solar jobs and force a surrender on the President’s climate goals.”

By Irina Slav for Oilprice.com

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