A US solar power boom is at risk of stalling just as the country needs a surge in clean energy projects to meet its goals to strip carbon from electricity supplies.
Strong demand from utilities, corporate buyers and some states is colliding with cost inflation and supply congestion, weighing on an industry that has been poised for another record year of growth in 2022.
The government’s independent energy forecaster this month published a rosy outlook for the sector, predicting the US would add 21.5 gigawatts of large, “utility-scale” solar generating capacity this year, nearly half the nation’s total and more than last year’s record 15-5GW.
But some forecasters have been slashing their outlooks and warning of project delays and potential cancellations.
Wood Mackenzie, a consultancy, recently cut its growth forecast for utilityscale projects in 2022 by a third. It now expects total installations, which also include rooftop and smaller-scale projects, will be less than last year.
“There are two realities for the solar industry right now,” said Xiaojing Sun, head of solar at Wood Mackenzie. “The demand for a clean energy product like solar is extremely strong . . . but the other reality is the situation on the ground, given Covid, the complex supply chain situation as well as some of the geopolitical factors.”
“It really feels like the industry is stuck,” Sun said.
Investors will receive new insight into US solar development on Tuesday when NextEra Energy, which owns a top US clean energy developer, reports financial results. The group in November said its wholesale power business had signed contracts for 4-3GW of new solar in 2021 and 2022.
The threatened solar slowdown comes just as the Biden administration is pushing to dramatically expand the technology to meet ambitious goals of making the power grid carbon-free by 2035. A Department of Energy report last year said solar could account for 40 percent of the nation’s electricity supply by then, up from just about 3 percent
The impasse over US President Joe Biden’s flagship clean energy and social
Bending bill has damped expectations for the industry’s future growth. But